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What Company Earns $1500 Every Second?

profits, revenue, moneyExxon Mobil has once again reported the largest quarterly profit in U.S. history. In the second quarter of 2008, it posted a net income of $11.68 billion on revenue of $138 billion in the second quarter.

That’s a profit of $1,485.55 a second.

The previous corporate record was $11.66 billion, also set by Exxon in the fourth quarter of 2007.

As an oil producer, the company makes a lot of money when crude prices rise. Exxon made $10 billion from selling oil in the latest quarter, up nearly 70 percent.

Defenders of oil company profits point out that their profit margin of around 8 percent is slightly below average for S&P 500 companies, and far below the 20 percent-plus margins seen at companies such as Microsoft or Pfizer.

Sources:

Dr. Mercola''s Comments Dr. Mercola's Comments:

At first glance, the fact that Exxon earned nearly $1,500 a second last quarter seems astronomical, and indeed it is. But is it really a bad thing … or simply a matter of perception?

True, Exxon does have a history of earning the largest quarterly profits in U.S. history. But their profit margins are around 8 percent, which is not at all unusual for S&P 500 companies.

The software industry actually boasts the highest profit margins, followed by drug companies; both of these sectors have profit margins of 20 percent and higher.

So perhaps it is a bit unfair to shake your finger at Exxon, simply because of the vast level on which they do their business. And although Exxon does make (huge) profits when oil prices rise, they also suffer.

Exxon is also an oil refiner, which means it must buy crude oil to turn into fuel. According to CNN, Exxon actually buys more crude oil than it sells, and their profits from their refining business this year were less than half of what they were last year.

Then again, Exxon is certainly not without fault.

What is Driving the Price of Oil?

I have not made a great study of the subject of oil price fluctuations and oil company profits, but I recently talked to an expert in this area. He and many other experts believe that as much as 60 percent of the price of oil is based on pure speculation from investors bidding up oil futures prices.

Meanwhile, oil companies are notoriously greedy, and the oil companies -- not the people who are selling the oil to you -- have record profits. Even back in 2005, when Hurricane Katrina destroyed much of the oil industry's infrastructure in the Gulf Coast, Exxon flourished.

Exxon's revenue went up 32 percent that year to over $100 billion, which is greater than the annual GDP of all but 38 countries.

Major oil companies like Exxon are also working to discredit global warming. According to the Exxonsecrets Web site, at least 124 organizations have received money from the company to spin a contradictory line against it.

Even though I think it’s quite clear that global warming is a natural cyclic occurrence that is not solely created by man, that does NOT mean I’m for continuing polluting the world as we are today. And I think that is what companies like Exxon are hoping for.

Ideally, Exxon would use some of their massive profits for the good of the environment -- looking for better, cleaner, safer energy alternatives -- instead of furthering financial and political platforms that ignore the real issue at hand, which is how to work toward creating a cleaner and healthier environment for all.


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Comment on This Article Community Comments (77)
 
 
Posted On Aug 06, 2008
Oil profits fund a lot of pension plans and go to people who have mutual funds and so forth. That's millions of Americans. 

 
Anathema
Apprentice User Apprentice User, Joined On 2/2007
Anathema  
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Phantom O Banjo
Savvy User Savvy User Joined On 9/2006
Phantom O Banjo  
 
Posted On Aug 06, 2008
Health man you should look to see what holding your 401k.  Should have  good balance in dividend paying companies to cover slow times.


Brazil123
Novice User Novice User Joined On 4/2008
Brazil123  
 
Posted On Aug 19, 2008

I am sorry, but Exxon does not nearly share as much as they could. their dividends are nothing to brag about. I am all for making money, and I have to admit I own some Exxon stock, it is a good stock to hold as the company conssistently pays dividends -dividend payments could be better though.



xyzsch
Apprentice User Apprentice User Joined On 10/2006
xyzsch  
 
Posted On Aug 21, 2008

Why pay dividends in a tax sheltered investment (e.g. 401k). They are intended to pay at retirement. If profit is reinvested, that means more long-term growth and capital appreciation for the portfolio.

For assets used to live off of, dividend paying stocks are more appropriate.


 
 
 
Posted On Aug 19, 2008

Does any one realize that our taxes just got doubled?  A bale of hay that a couple of years ago cost $8 is now $16!!  The govt. just doubled it's income and we hate the oil companies???  LOL

I have a question for _No_Name_:  How can food shipped from other countries be sold here for less than our own farmers can produce it for?  Who's paying for the shipping?  Something's not adding up here.

Our farmers are systematically being put out of business.  If we truly had a free market there would be no need for subsidies.

People that get paychecks are easier to control than those who work for themselves.  

Why has the logging industry been shut down in this country? and our forests left to burn?    

We are being turned into a third world country and we the 'sheep' are mostly oblivious.  


 
dama
Novice User Novice User, Joined On 3/2008
dama  
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Think First
Novice User Novice User Joined On 2/2008
Think First  
 
Posted On Aug 20, 2008

There's something you need to understand here. The reason countries can make, ship then sell stuff cheaper here than we can is largely due to the vast amount of cheap labor they depend on to undercut everyone else. Plus in many of these countries, they get huge subsidies from their government to stay in business. One of the dirty little secrets to all those free trade agreements is we cannot put a tariff on their goods they ship to us. Reagan tried a few times to get congress to stipulate in all trade bills that they had to meet accepted pay and work environment standards with no government subsidies or they would be slapped with a tariff to offset it. In other words he tried to level the playing field. Congress went bonkers, especially those with a large number of foreign companies with offices in their districts. Needless to say it never passed.

He was the last one with the cajones to even try. None since even bother. You see even with the higher labor costs here, the main reason many companies seek offices overseas is because of the taxes here. One of the secrets why the tax breaks work so well and held down inflation so long is because the corporate taxes were reduced. When they go up, so do prices. You're not cutting profits, you're only giving them ammo to raise prices they may have left alone. They also tend to cut jobs in a high tax environment. In many countries that are doing the best right now, most companies have a lifetime exemption from taxes because they know when the companies stay in business, people have jobs and they pay taxes.

And don't forget. The Apartheid government in South Africa instituted a minimum wage law for one reason, to keep blacks out of the job market. They have it on record and it's been proven by Nobel Prize winning economists. When you have a minimum wage, you keep the poor out of work, raise prices and increase the cost of doing business. Companies fold every time it goes up. Jobs go with them. You help no one.



xyzsch
Apprentice User Apprentice User Joined On 10/2006
xyzsch  
 
Posted On Aug 21, 2008

    The US is not so innocent whn it comes to free trade. The sugar, tomato and sheep markets all have protection, due to the strength of their lobbying efforts. Every country wants to protects its agricultural industry. Note that if you believe in buying fod locally, you are free to. But I don't think our domestic food producers have our health in mind. They just want to protect their markets from compettition.

      On the minimum wage, I think in most markets it is now nonbinding (i.e. irrelevant, because employers are paying more than $5.15/hr. to attract workers). Thus, minimum wage caused unemployment is not happening to any degree today. The cause of unemployment is a cyclical downturn (read: the mortgage crisis and high energy prices). Of course, a Democratic president my push for a substantial raise in the minimum wage, and this could lead to more unemployment.


 
 
 
Posted On Aug 06, 2008
Well, hmmm - I guess I am confused how people are surprised by this?

Demand is close to record levels too. Price is up. Put 2+2 together and you get...

Additionally - those companies do have a responsibility to their shareholders, that's your corporate life of publicly traded company. If they do indeed make 9 cents per gallon that's what around 0.4%? And people are outraged?

Go complain to Apple who you posted about yesterday. They make about 100% markup on their iPhone stuff. Talk about double standard...

 
bigboy29
Apprentice User Apprentice User, Joined On 5/2007
bigboy29  
 
 
 
Posted On Aug 06, 2008
This is only a 8.5% profit margin.  It is only that the revenue is so big that this is a big deal.  8.5% isn't huge there are a lot of companies that have much, much higher profit margins, though none with quite the revenue.

 
bport
Novice User Novice User, Joined On 8/2008
bport  
 
 
 
Posted On Aug 08, 2008
The key to this argument is in the last paragraph of the article: "Defenders of oil company profits also point out that their profit margin, at around 8%, is slightly below average for S&P 500 companies, and far below the 20%-plus margins seen at companies such as Microsoft or Pfizer." 

The key here is that the sales volume is so high, the numbers are astronomical.

I would venture to say that the oil companies' profit margin (in percent) is actually lower than the products sold on this website. Certainly there is nothing wrong with making a profit, but this is the (small) pot calling the (huge) kettle black.

Raising taxes on the oil companies may sound reasonable, but it will ultimately cause the price of gasoline to go up at the pump, regardless of other factors. 

This article is not the definitive statement on this issue, far from it. If you want the full story, go elsewhere.

 
Mr.AK
Apprentice User Apprentice User, Joined On 6/2006
Mr.AK  
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Rett
Novice User Novice User Joined On 11/2006
Rett  
 
Posted On Aug 19, 2008

I don't believe Dr. Mercola is "defending" a profit margin.  He is just relaying information to people so that they can see the numbers and compare them with other companies whose profit margins are a lot higher. It's called the art of conversation through computer technology. :)  Dr. Mercola is sharing information somebody else shared with him.  WalMart has a more impressive profit margin than Exxon and I don't see the media or anybody else beating on  them.  They sell food, forgoodnesssake.  And the foods sold there are questionable at best and the quality of their other goods is absolutely bottom drawer.  Many articles of clothing I have bought there comes apart or the fabric pills up. And employees in many Walmart stores are treated so bad but they have to keep their jobs.  They have families and jobs are at a premium. We should ride public transportation and car pool when ever possible.  We should stop throwing out trash from vehicles or while walking littering up the planet.  I'll walk my little dogs and find trash all around the property where somebody had tossed a beer/soda pop bottle/can or candy wrapper or even the bag their purchase was in.  We live a block away for a convenience store and the trash from their customers winds up in my yard.  I live close to a lake and there is a ring of litter all around that lake. I went there once to be baptized and it was so sad to see all that trash.  Global warming is bad science and a false religion. It is a marketing stradegy and those behind is are profiting beyond belief. They are like big pharma who laughs all the way to the bank at our expense.  God is not pleased. Littering up our planet is a serious wrong and God is not pleased.


 
 
 
 
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