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View Full Version : How much is too much? How about $10.7 BILLION in PROFIT?!



MagicMtnDan
01-30-2006, 07:33 AM
Exxon Mobil posts record profit of $10.7 billion
Fourth-quarter earnings top targets for world's largest oil company
Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world’s biggest publicly traded oil company benefited from high oil and gas prices and demand for refined products. The results exceeded Wall Street expectations.
The companyÂ’s earnings amounted to $1.71 per share for the October-December quarter, up from $8.42 billion, or $1.30 per share, in the year ago quarter. The result topped the then-record quarterly profit of $9.92 billion Exxon posted in the third quarter of 2005.
ExxonÂ’s profit for the year was also the largest annual reported net income in U.S. history, according to Howard Silverblatt, a stock market analyst for Standard & PoorÂ’s. He said the previous high was ExxonÂ’s $25.3 billion profit in 2004.
Quarterly revenue ballooned to $99.66 billion from $83.37 billion a year ago but came in shy of the $100.72 billion Exxon posted in the third quarter, which was the first time a U.S. public company generated more than $100 billion in sales in a single quarter.
By segment, exploration and production earnings rose sharply to $7.04 billion, up $2.15 billion from the 2004 quarter, reflecting higher crude oil and natural gas prices. Production decreased by 1 percent due to the lingering effects of hurricanes Katrina and Rita, which battered the Gulf Coast in August and September.
The companyÂ’s refining and marketing segment reported $2.39 billion in earnings, as higher refining and marketing margins helped offset the residual effects of the hurricanes.
ExxonÂ’s chemicals business saw earnings, excluding special items, decline by $413 million to $835 million, as higher materials costs squeezed margins.
For the full year, net income surged to $5.71 per share from $3.89 per share in 2004. Annual revenue grew to $371 billion from $298.04 billion.

MagicMtnDan
01-30-2006, 07:35 AM
How much is a billion?
1,000,018,176 pennies - one billion, eighteen thousand, one hundred and seventy-six Pennies take up the space of about five school buses.
Each of these blocks represents one 9x11x41 foot school bus - as seen below. If you were to stack all these pennies in a single pile, one atop the other, the stack would reach nearly one thousand miles high. For comparison, note that the Space Shuttle typically orbits only 225 miles above the Earth's surface.
And this is just pennies not dollars!
http://www.kokogiak.com/megapenny/one_bill_A.jpg

MagicMtnDan
01-30-2006, 07:37 AM
ONE BILLION:
How much is one billion? It's common knowledge that a billion has three more zeros than a million, and is one thousand times a million, but comprehending its enormous magnitude is often misunderstood. To appreciate the distance of one billion light years, the concept of one billion people, or the value of one billion dollars, let's try putting this number into perspective.
To count to one thousand, counting one number every second continuously, it would take 17 minutes. Counting to one million at the same rate, it would take 12 days (counting nonstop, day and night). But counting to one billion would take 32 years!
That's right; years.
Imagine counting $1 billion with $1,000 dollar bills (hypothetically). Using the above calculations, at the rate of $1,000 per second, you'd be counting your cash for 12 days!
Bill Gates was estimated to be worth approximately $40 billion in 1998. At the present age of 44, let's predict that he lives another 40 years. Assuming he retires tomorrow, and never earns a dime of interest, in order to deplete his funds at a constant rate over the next 40 years, he would have to spend $1 billion (or $1000 million) a year! That's $83 million a month, $19 million a week, or breaking it down further, he would have to spend over $114,000 an hour, day and night, for 40 years. Bill Gates, ladies and gentleman, is a rich man.
One final comparison: one million is one thousand thousand, and one billion is one thousand million. As illustrated below, there is an astonishing difference between an "m" and a "b" in front of "illion!" Using the same scale below (where one billion is 6 inches to the right of one million), one trillion would reside on the same line, 500 feet to the right of one billion!
http://www.expandyourmind.com/sciencefacts/images/one_billion.gif

Big Warlock
01-30-2006, 07:41 AM
I think it was reported that their profit represents approximately 7% on money invested! Microsoft makes over 30% on money invested. Just because it's a big number doesn't mean it's a disgusting amount!
If you invest $100,000 and make a return of $200,000 would you consider yourself a bad person? Mobil / Exxon risks their money in investments all over the world, in harsh conditions for their investors. Investors like you and I. You are welcome to invest with them. Here's an idea, look up what a share of stock costs for them. Then back calculate your return for the price of the share. Still think it's too much money in earnings?
Sorry, had to vent on that one! I am tired of people always wanting to make money but begrudge others that are out there working their a$$ off to make it! Go invest your money or better yet, go start a business and show us all what you got!!!
My .02 cents for the day! :220v:

Tom Brown
01-30-2006, 07:42 AM
How much profit is too much? :confused:
I'll take a free market over the communism you dems seem to love so much. :mad:

mike37
01-30-2006, 07:47 AM
I think it was reported that their profit represents approximately 7% on money invested! Microsoft makes over 30% on money invested. Just because it's a big number doesn't mean it's a disgusting amount!
If you invest $100,000 and make a return of $200,000 would you consider yourself a bad person? Mobil / Exxon risks their money in investments all over the world, in harsh conditions for their investors. Investors like you and I. You are welcome to invest with them. Here's an idea, look up what a share of stock costs for them. Then back calculate your return for the price of the share. Still think it's too much money in earnings?
Sorry, had to vent on that one! I am tired of people always wanting to make money but begrudge others that are out there working their a$$ off to make it! Go invest your money or better yet, go start a business and show us all what you got!!!
My .02 cents for the day! :220v:
thats a dam good response

HCS
01-30-2006, 07:54 AM
How much profit is too much? :confused:
Agree. No such thing as too much.
Reminds me of salary caps.

MagicMtnDan
01-30-2006, 08:15 AM
Funny stuff actually.
You compare investing $100K and making $200K to what the big oil companies are doing.
Here's a news flash for you: THEY CONTROL THE PRICE OF GASOLINE AND OIL PRODUCTS AROUND THE WORLD! There are a handful of companies that dictate the prices for every consumer of oil and oil-based products.
A better comparison is if you had a handful of companies controlling all food or water around the world - having them set the prices for everyone.
This isn't about investing and making profit - it's about CONTROLLING the price of oil/oil products and turning up the profit knob almost at will.
I think it was reported that their profit represents approximately 7% on money invested! Microsoft makes over 30% on money invested. Just because it's a big number doesn't mean it's a disgusting amount!
If you invest $100,000 and make a return of $200,000 would you consider yourself a bad person? Mobil / Exxon risks their money in investments all over the world, in harsh conditions for their investors. Investors like you and I. You are welcome to invest with them. Here's an idea, look up what a share of stock costs for them. Then back calculate your return for the price of the share. Still think it's too much money in earnings?
Sorry, had to vent on that one! I am tired of people always wanting to make money but begrudge others that are out there working their a$$ off to make it! Go invest your money or better yet, go start a business and show us all what you got!!!
My .02 cents for the day! :220v:

Froggystyle
01-30-2006, 08:17 AM
My advice regarding oil company profits has always remained the same...
If you think you can do the job better and cheaper, get a business plan together and go start an oil company.
And Dan, they are not "controlling" anything except the valves on their own pipes. They should be able to charge whatever the market will bear for the stuff coming out of them.

MagicMtnDan
01-30-2006, 08:19 AM
My advice regarding oil company profits has always remained the same...
If you think you can do the job better and cheaper, get a business plan together and go start an oil company.
Jeez Froggy, that sounds like a politician's soundbite. :( There were companies that were competing with the oil companies but the big oil companies bought them out (because our government allowed them to). Now there's no one left to compete and no opportunity for anyone to do so.

dmontzsta
01-30-2006, 08:37 AM
And they cant make gas $2 a gallon again. EVER!

Tom Brown
01-30-2006, 08:57 AM
And they cant make gas $2 a gallon again. EVER!
... except in Iraq where it seems to go for less than 4 cents per gallon. :D

HotDogz
01-30-2006, 09:31 AM
with gas @ almost $3 a gal. , makes sense to me.

Big Warlock
01-30-2006, 09:52 AM
Dan,
You should be able to start an oil company and then sell it to the big boys for a tidy sum. How many oil companies can you name? Retailers, exploration and production?
Mobil / Exxon, BP, Shell, Anakardo, Sinclair, Texaco, Murphy's, Standard Oil, ARAMCO, Pemex, Nigerian National Oil, NASCO, The Venezuelan National Oil Co, Russia has several, AGIP, Every country in the world has one, Gulf Oil, Union 76, Transco, Giant.......the list goes on and on. There are hundred in this country alone, if not thousands of oil companies, independent retailers, etc. etc. Many countries have offered to build more refineries. The United Sates said no. They offered to build them in the Carribean or in other countries and ship to the United states, our country again said no. It is acknowledged by all parties that supply is just barely able to keep up with demand. But the politicians can't agree on getting more built or importing of refined products.
So you tell me what the solution is? Higher prices have made all of us think more about how we use our fuel. I know I think about every boating trip and consider it on my next boat purchase. How much fuel will I burn a day? How far can I go? etc. etc. Stemming demand has made it possible to not have fuel shortages.
Again, they made 7% on their money! Jeeeeesh! Not that great if you ask me. (I think I read that in the WSJ when they had the hearings).
But I bet you there are more kinds of gas retailers than tire dealers? And I wonder how many computers are not run with Microsoft software? Hmmmmm? You don't seem to harp on those guys? The oil company and it's millions of investors made 7%. Bill Gates makes billions himself and your not on his case. Well not yet.
Russia is doing well. You might think about making a trip! Might open up your business thinking a bit more.
Great topic though! I appreciated it very much! My mind needed some stimulation and I love a good argument! Nothing personal, I promise! Next time on the lake the beer is on me!
Rob :cool:

Jordy
01-30-2006, 10:16 AM
Next time on the lake the beer is on me!
Shit, may as well bust out the Johnnie Walker Blue as this is MMD you're talking to. Pretty safe offer. :D :D :D

Howie Feltersnatch
01-30-2006, 10:32 AM
Anybody who thinks you're living in a free market is a fool. You're too far down the food chain to have a clue.

DCBob
01-30-2006, 11:11 AM
BTW, will work for gas :D

sdpm
01-30-2006, 11:13 AM
I am going to build the world's largest Air Purification Filter and charge everyone in the world for every breath they take because the air went through MY filter. Get you check books ready. Anyone want to buy some stock?
Nothing's FREE !!

rivergoer
01-30-2006, 11:21 AM
i think the gas compannys are greedy a$$ bitc hes :) :) my$0.2

Big Warlock
01-30-2006, 11:55 AM
I keep forgetting how far down the food chain I am!!! :rolleyes:

Big Warlock
01-30-2006, 12:18 PM
I am too far down the food chain to know....compared to those on this board that are probably CEOs of oil companies and DO know. Safe assumption? Probably beter educated and well versed in economics and whatever. Forget about looking at the facts presented already regarding the number of oil companies that exist etc. etc.
The true problem is the politicians. The world is not out of oil. And most of the resource is located in other countries (of which we have to kick some a$$ now and again to get them to understand our needs.) LOL
And oil is not really comparable to air. You might be able to find it, but can you refine the oil to make the productss you need? How many of you even realize how many products come from petro chemicals? Do any of the patents that people invented to produce the products you enjoy today deserve anything for their efforts? The list of products that come from oil is amazing in itself!
I understand it's fun to sit here online and bash big companies that make "billions" and say that they control everything. No doubt, they control alot. But when you look at the list of the Fortune 500 top wealthiest people, there are only a few left from the oil era. Most of the wealthiest people have made their money in land, technology, money services, food, retail. The days of the "material resource" wealth have long been put away. Mostly investors own those companies. And you, if you have a 401K or retirement, probably own a piece of the action.
It's not a perfect system, I agree. I still see politics as the biggest obstacle to free market enterprise. But you all scream at the thought of gas prices going up without looking at the cause. The cause is a good problem for our country.
Here is the secret fact you all want to know: There have been no new refineries built in the last 20 or so years. The economy has continued to grow (thank you Lord!). As the economy grows, more "gas" is required. We are at the point where there is more demand for "gas" than is being produced. So prices have increased to slow down the demand for gas.
Investment tip of the day:
Look at the largest construction companies specializing in refinery construction to grow their revenues in the next ten years! Some picks would be Halliburton (Brown & Root), Bechtel, Parsons, Fluor Daniel.
I am very low on the food chain, but would love to hear your response to "facts." And thanks for taking my air purifier idea away! (Actually, they sell quite a bit of those as well right?) :)

Old Texan
01-30-2006, 12:44 PM
Funny stuff actually.
You compare investing $100K and making $200K to what the big oil companies are doing.
Here's a news flash for you: THEY CONTROL THE PRICE OF GASOLINE AND OIL PRODUCTS AROUND THE WORLD! There are a handful of companies that dictate the prices for every consumer of oil and oil-based products.
A better comparison is if you had a handful of companies controlling all food or water around the world - having them set the prices for everyone.
This isn't about investing and making profit - it's about CONTROLLING the price of oil/oil products and turning up the profit knob almost at will.
MMD: The prices are not set by the oil companies. Markets and supply and demand dictate the cost of a barrel of oil which in turn effects gas prices.
Nobody likes to spend more than necessary but it is the way of capitalism and capitalism is far and away superior to alternatives economies.
Study commodities and put your money at risk. If you are good you'll smille at the price increases. :rollside:

Froggystyle
01-30-2006, 12:48 PM
Why don't you check out the profits made by clothing companies if you really want to get ill. Or shoe manufacturers. The list goes on and on.
The reality is, higher gas prices are going to do what every single tree-hugger has in mind... slow down fuel consumption.
There is an old saying about why divorces cost so much... because they are worth it. I would rather spend quite a bit of money driving to work than walking. See it get much higher, and I would likely switch to the bike for day-to-day use, and leave the truck at work. This mentality shift is exactly what will allow America to become more self-sufficient on American oil and technology. Nobody cares about our dependence on foreign oil at $2 per gallon. Watch some Caribou infested wasteland get drilled at $5 though. Maybe even some refineries built.
If this price increase allows Americans to start bypassing some of these evironmental hurdles to supplying our own oil and possibly some more nuclear energy for heating and such, I would be happy to pay the difference.
America is at risk because we are playing a game by rules that nobody else adheres to. We are protective of copyright laws and patent law, we protect foreign investors while our own investors get little protection when investing abroad and we treat illegal immigrants like family. Something has to catalize our regaining of independence, and fortunately it will be financial and not military. Our outsourcing of labor, technology and manufacturing should be stupid, not illegal. It shouldn't make sense to send the jobs elsewhere. American workers should understand that a lowering of wage or benefits is far greater than the loss of the job altogether.
And, as the greedy folks we are, we purchase largely imported products for economical reasons. I don't go for the whole "Buy American, the job you may save could be your own" bullshit. I think it is the opposite in fact. I think that the phrase should be "work for what the job is worth... the job you save could be your own". When I can outsource a product, or buy imported and it allows as much as a 80% cost savings over buying here... there is a problem. There is a pretty good chance I am paying for someone's motorhome bill, or second house payment. Overseas, you are paying for someone's rice bill. Our country is losing capability because the needs of our workers is exceeding the skill they are bringing to their professions. The American worker has been screaming about how great they are for so long, that now they are screaming it to the lady at the job search counter. Turns out, they got replaced.
My Aunt and Uncle have been working for the city of San Diego for damn near 25 years each. They actually earned retirement years ago, and now are still working and collecting retirement. More specifically, they were working and getting paid 25 year seniority pay and collecting retirement pay. Neither are anymore thanks to our new mayor, and both have been replaced with damn near interns.
Most people are not as valuable as they think they are. They push the limits and get fired and now have to go work at a quickie mart somewhere, amazed that the 20 years they spent building geothermal valves or something was of no use to them in the job market.
The oil companies are taking huge risks every day. They earn whatever they can charge and get away with. If you don't like it... ride a bike to work. Let me know how that works out for you.

Big Warlock
01-30-2006, 12:53 PM
Well said Ol Texan and FroggStyle!
I was getting worried this board was filled with......well you know......lots of people and JORDY!!!!!!! :)
I think I'll go buy a 38 Top Gun just to piss someone off!!! :yuk:
La la la la la la la :cool:

Jordy
01-30-2006, 12:57 PM
I think I'll go buy a 38 Top Gun just to piss someone off!!! :yuk:
Yeah, she'll be really pissed if you come home with anything less than a 42' Outerlimits. Ha ha ha ha ha
OSO seems to be down or I'd point you in the direction of a few that I like in the Gun category. ;)

Froggystyle
01-30-2006, 01:00 PM
As a side note, I recently found out that the Chinese are crushing the Mexicans now in the garment industry. Wanna know how?
When a clothing designer phones a Mexican company and says "Hey, I wanna build some stuff" the Mexican company sets a date and time, meets with you and discusses options.
When a Chinese company sets the date and time, they ask for your logos and such so they can play around a little.
When you show up to the meeting, you have 10-30 items all finished, logoed and ready to pick from for starters. They take the weight of designing and implementing, building some product ideas and at that meeting, they will have completed a lot of the development burden, and allow you to have a very short, if any, lead time. They close the deal. Ship me some damn product.
They are doing a better job, at a far more competetive price. I know for a fact that my silkscreening bill has to pay for at least one Porsche. Who knows who is making more money at every different level in that.
I should talk... Down the road, some of you boat buyers are going to be paying for a Ferrari... for much the same reason. This guy is giving me a very, very nice product that I don't think can be outsourced effectively or where it makes financial sense. The customer service and attention to detail is phenomenal, and I am happy to give him whatever profit he is making because to me, it is worth it. It doesn't make sense for me to send the work offshore because I am getting such a good job done here.

Red Horse
01-30-2006, 01:14 PM
Getcha some Exxon Mobile stock. I do. I made money on my gas purchases last year, did you!! Let it roll baby.

Havasu Hangin'
01-30-2006, 05:39 PM
Free Market Economy = Legal
Monopoly/Price fixing = Illegal
MMD: The prices are not set by the oil companies. Markets and supply and demand dictate the cost of a barrel of oil which in turn effects gas prices.
Q. Have you guys ever wondered how the retail prices can be raised (across the board) based on news stories (Iran, Katrina, etc.), when the cost of the refined fuel in the ground tanks hasn't changed yet?
A. Because the few oil companies left control enough market share to control the wholesale and retail price.
Supply and demand has nothing to do with it anymore. If it did, there would be a lag between the price of the commodity and retail price as that commodity gets processed.

BadKachina
01-30-2006, 06:07 PM
Yeah, she'll be really pissed if you come home with anything less than a 42' Outerlimits. Ha ha ha ha ha
OSO seems to be down or I'd point you in the direction of a few that I like in the Gun category. ;)
You could buy a 39 GTX and she'd never know the difference. Just tell her it's the same as a 47 Fountain.
BTW, what's up with OSO................. :mad:

Jbb
01-30-2006, 06:10 PM
I am,myself,quite offended by the profits HH hauls in every year.....he makes me call him...Big Baller.... :rolleyes:

rrrr
01-30-2006, 06:26 PM
Free Market Economy = Legal
Monopoly/Price fixing = Illegal
Q. Have you guys ever wondered how the retail prices can be raised (across the board) based on news stories (Iran, Katrina, etc.), when the cost of the refined fuel in the ground tanks hasn't changed yet?
A. Because the few oil companies left control enough market share to control the wholesale and retail price.
Supply and demand has nothing to do with it anymore. If it did, there would be a lag between the price of the commodity and retail price as that commodity gets processed.
The oil companies don't raise their prices. The futures market does. Did you know Southwest Airlines is buying jet fuel for $1.45/gallon while some other airlines are paying close to $2.00?
That's because they have an intricate, sophisticated hedge strategy and they run it very well.

Havasu Hangin'
01-30-2006, 06:34 PM
That's because they have an intricate, sophisticated hedge strategy and they run it very well.
Their "hedge strategy" is simple- executing a price increase before the cost of goods catches up. It a common practice in any retailing sector. The difference is that most retailers can't get away with it, since the competition will almost keep other retailers honest.
Since the oil companies control the wholesale and retail price (they probably control over 85% of the retail outlets), so there is no checks and balances.
The FTC let it happen.

rrrr
01-30-2006, 06:46 PM
Their "hedge strategy" is simple- executing a price increase before the cost of goods catches up. It a common practice in any retailing sector. The difference is that most retailers can't get away with it, since the competition will almost keep other retailers honest.
Since the oil companies control the wholesale and retail price (they probably control over 85% of the retail outlets), so there is no checks and balances.
The FTC let it happen.
I was talking about Southwest, not the oil companies.

Havasu Hangin'
01-30-2006, 06:50 PM
I was talking about Southwest, not the oil companies.
I know. I was focusing on yer buddies (the oil companies).

Jbb
01-31-2006, 06:04 AM
There is always the rocket bike option... (http://www.cnn.com/2006/TECH/01/24/rocket.bike/index.html)

MagicMtnDan
01-31-2006, 07:53 AM
Here is the secret fact you all want to know: There have been no new refineries built in the last 20 or so years. The economy has continued to grow (thank you Lord!). As the economy grows, more "gas" is required. We are at the point where there is more demand for "gas" than is being produced. So prices have increased to slow down the demand for gas.
You make good points, thanks.
Sure, "there have been no new refineries built in the last 20 or so years." Besides blaming the politicians (who are certainly a big part of the problem), exactly why would the oil companies want to spend money on refineries when they're busy making huge profits while keeping tight control over the supply of gasoline to the pumps which enables them to manipulate the price per gallon?
If the oil companies invest big money in refineries you can be sure they'll close old refineries instead of having a big increase in refined oil product supplies. Why? Because they're public companies that, by their very nature, are driven to inrease profits EVERY quarter. The problem for consumers (us) is that the oil companies CAN control their profits by squeezing supplies to the markets. (Again, lack of competition kills us here).
There haven't been any new refineries in years. But the oil companies have closed many in that time. And they've shut down refineries for "maintenance" or whatever other "reasons" they've given (some legitimate but you have to question the timing of many of their moves). They are masters at manipulating the markets.
Most seem to agree that there's no shortage of oil resources (in the ground). And sure, the demand for gas is skyrocketing (thanks to Europe, the US, and India and China). So, there's plenty of oil and plenty of demand which explains why the oil companies profits are higher than ever.
So why are the prices per gallon so high? It's because the oil companies WANT them to be high and because they CAN MAKE them be high. That's what I object to! ( I'm not unhappy about the record profits I'm PO'd about how they're able to manipulate the market pricing at their whim).

Big Warlock
01-31-2006, 08:09 AM
however, I think if the politicians allowed the Saudi's to build refineries here or in the Carribean and import, the local guys would be motivated to build as well. Competition. But there is still enough competition domestically to allow for motivation to do it.
Here is the statement you'll hate. Give the oil companies tax breaks for building additional refineries or refining capacity. (We can add to the existing facilities.) That would also prove to be a powerful motivation in building more capacity.
The Saudi's, by the way, are motivated because of their own interests in our country. They are heavily invested within the US economy. They are, by population, a well educated group. Probably more so per capita than the US. They see the dangers of rising fuel prices and slowing of our economy. So they are motivated to building and providing capacity as well.
Still a great debate. I have enjoyed it!!
See you on the lake! who's going to Desert Storm Poker Run this year?
And BK, I don't know exactly what I am getting just yet, but I am getting something soon.
Rob

Jordy
01-31-2006, 08:15 AM
Just tell her it's the same as a 47 Fountain.
I'd almost rather have a Kachina with wizards, turkey gizzards, and fat necked girls on it than a beak boat. :D :D :D
BTW, what's up with OSO................. :mad:
Good question. :notam:

SB
01-31-2006, 08:21 AM
Some people don't gain understanding until they are hit over the head repeatedly. You saw this in CA where it was impossible to build a power plant, until there was no power. Then they got it, "oh yeah" I want power. It's tough to build refineries, and we have different gas formulations which can cause the price to go up until these idiots finally make the connection, "oh yeah" I want cheaper gas.