ExxonMobil CEO Defends High Profits

[RamboLiberal]

Source: ABC News

ExxonMobil CEO and chairman Rex Tillerson defended his company's staggering $11.7 billion in profits for the second quarter, saying that the company's earnings reflected the magnitude of its business operation.

"I saw someone characterize our profits the other day in terms of $1,400 in profit per second. Well, they also need to understand we paid $4,000 a second in taxes, and we spent $15,000 a second in cost," Tillerson told ABC News' Charles Gibson. "We spend $1 billion a day just running our business. So this is a business where large numbers are just characteristic of it."

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Tillerson's suggestions for energy efficiency echoed recommendations by presumptive Democratic nominee Sen. Barack Obama, who called for tire-inflation and proper car tuneups to provide relief to distressed voters.

"Things like providing lighter weight tires, tires that retain their pressure more efficiently, lighter weight plastics to go into vehicles to reduce vehicle weight" will help consumers use gas more efficiently, according to Tillerson.

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As for John McCain's solution to "drill now, drill here," Tillerson said that instead we should focus on both efficiency and drilling.

"We can't drill our way out of this problem, just like we can't conserve our way out of this problem, just like we can't alternative fuels our way out of this problem," he said. "There is no one solution to this; there's an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point."




Read more: http://abcnews.go.com/Business/story?id=5574568&page=1

[tazkcmo]

1. Fuck Exxon, et al

But I will have to say he's right when he says, "There is no one solution to this; there's an integrative set of solutions. And you have to undertake them all. So when the whole debate focuses around we have to choose this one solution or that, people are missing the point."

Put those big numbers where your mouth is now asshat.

[babylonsister]

2. He must think we're all stupid; they roll this out every quarter when

they make such disgusting profits while the peons suffer. :eyes:

[bdamomma]

28. sister, do you think these thugs even care about us regular people.

[fascisthunter]

3. Can We RICO Exxon/Mobil?

[Hawkeye-X]

5. Yes, and we can levy 100% windfall taxes, 500% corporate profiteer taxes

and other taxes we can think up just to twist the corporate's panties in a knot.

They need to give the money back to the unwashed masses, in cash. $1 million to all Americans. No question asked - tax free - since the corporate has been paying no taxes thank to some PO in Bumfuck Island, Cayman Islands.

Hawkeye-X

[tritsofme]

11. $1 million to every American?

That's your solution?

Gee I bet everyone would be so much richer if everyone had $1,000,000 more dollars.

[Lost4words]

15. Sounds good but if that happened a loaf of bread would cost $65,000.

and a gallon of gas = 175,000.00

They will never let us get a foothold!

8643

[WriteDown]

16. Windfall taxes are unenforceable.

The tax would just be passed on to the consumer as virtually every other tax is. Gas would be 15$ a gallon. In truth a business never really "pays" any taxes. These are paid by us. Eliminating tax shelters on the other hand is never a bad idea.

[Mudoria]

20. No one ever thinks about that though.

Windfall taxes makes everyone all warm and fuzzy inside but no one ever gives a thought to the extra costs being passed on to consumers. Politicians do love meaningless gestures though if it can get a vote.

[Hannah Bell]

22. Not so. There's a reason corps don't like taxes, & it's precisely

because they can't "pass on" the costs quite so easily.

This "they just pass it on" is a r-wing meme. But it's not true.

[WriteDown]

23. My degrees and experience speak otherwise...

Econ is neither right-wing or left-wing. It is neutral. Trust me, no business actually pays taxes. You do one of two things, you either limit supply or pass it on as a cost to the consumer.

[Hannah Bell]

25. your degrees & experience?

you're saying, then, that companies can charge whatever they like, & people will pay. maybe in a market where consumers have to buy x amount to live - like water - & there's no competion.

but in the real world, if consumers don't like the price they can go to a competitor, reduce purchases, & find alternatives for most things.

if a tax is put on a product, the producer can choose to pass it on to consumers - but the risk is, his competitor will pass on less of it, & take his market share - or consumers will buy less, & reduce his profits.

this is why corps don't like taxes, & this is why you're wrong. unless you're saying the market is rigged & collusionary - which is partly the case.

but in an actual "free market," taxes can't simply be "passed along" to consumers. it's a right-wing meme "passed along" by the very corps who don't like taxes.

[WriteDown]

27. actually, yes.

If demand is high enough, you can charge up to that point. Lets put it this way. You have a lemonade stand and you can make maximum of 100 glasses each morning that are ready for sale due to manufacturing constraints(your hands will fall off if you have to wring any more lemons). Your lemonade costs 1$ and you sell 100 glasses a day earning you 100$. A 1$ tax on lemons is passed and now you raise your lemonade costs to 2$ a glass. You still sell 100 glasses a day for 100$. Another 1$ tax is passed and you try raising your prices to 3$ a glass. You notice that only 50 glasses of lemonade are purchased(50$) and you are left with 50 extra glasses each night which you have to throw out. Do you hire another employee to help wring lemons, lower the price of your lemonade, or reduce your supply?

[Hannah Bell]

30. dumb response.

"if people are willing to buy at any price & there's no competition, you can charge as much as you want"

[WriteDown]

34. you have to establish "givens" in any economic argument

In this instance, we were initially talking about gasoline which i still think has plenty of room to raise prices without a significant loss of demand. when i said no competition, i was refusing to perfect competition where prices are very tight and there is little differentiation in the price between the competitors. If you don't understand how this all works, just let me know and I will try to break it down for you.

[Hannah Bell]

35. which is why US consumption dropped nearly 900,000 barrels/d

this year. Equal to the entire increase in world demand 2006-07.


You're blowing smoke because you can't refute the argument.

[WriteDown]

36. And gas prices decreased to increase demand right?

Or did prices increase? I can't remember. Please do enlighten me. :sarcasm:.

PS. And profits went down too due to the decreased demand? right? hahaahah

[Hannah Bell]

37. In fact, in inflation-adjusted $, profits have been flat since 2006.

e.g. exxon: the years covered by the recent price run-up:

Profits: Nominal & inflation-adjusted (2008) (billions)

2004: 25.3 & 29.46

2005: 36 & 40.55

2006: 39.5 & 43.10

2007: 40.6 & 43.07

It was 2004-2005 profits rose most: right at the beginning of the price hikes.

When prices kept rising, people adjusted their behavior, & profits flattened.

This in a monopolistic industry with a high degree of collusion, for a product that most people/industries MUST have to survive.

Still, adjustments can be made. Companies can't charge whatever they like indefinitely, nor can they just pass along taxes.


http://data.bls.gov/cgi-bin/cpicalc.pl

In 2008, exxon's first-quarter profit was 10.76 billion. If they do the same all 4 quarters, they'll be down again.

But I'd expect each quarter a little worse. Once people start changing their behavior, it stays changed for awhile.

[Hannah Bell]

43. oil at $111 today, btw. off its high of $147 in about 1 month.

[Hannah Bell]

45. bullshit.

[OwnedByFerrets]

4. FUCK YOU!!

[Lorien]

6. Um, PROFIT doesn't include expenses

what a tool.

[melm00se]

13. how do you figure?

profit is calculated thusly:

Total Revenue
minus Cost of Revenue
minus Total Operating Expenses
minus Interest Expense
minus Income Tax Expense
equals Net Income From Continuing Ops

or, IOW:
Total Revenue...........$138,072,000,000
Cost of Revenue.........$(87,099,000,000)
Operating Exp...........$(28,435,000,000)
Interest Expense........$( 107,000,000)
Income Tax Exp..........$(10,526,000,000)
Minority Interest ......$....225,000,000 (never knew exactly what this is)
Net Income (or profit)..$ 11,680,000,000

If you are going to argue about profits and revenues, please learn to read an income statement (http://finance.yahoo.com/q/is?s=XOM), a balance sheet (http://finance.yahoo.com/q/bs?s=XOM&annual) and cash flow statements (http://finance.yahoo.com/q/cf?s=XOM&annual). they aren't that hard to understand.

[boilinmad]

18. Like Lorien said......

....PROFIT DOESNT INCLUDE EXPENSES. It's whats left over after all your expenses have been paid, correct? Even if you had a bazillion dollars in expenses and STILL ended up with 12 billion dollars profit, who gives a fuck, you still have 12 BILLION DOLLARS PROFIT, no?

[melm00se]

19. Does the concept of a profit margin elude you?

while their profit is huge, take a look at the total revenue.

$138 billion in revenue and they made 8.6% in return.

compare that to a lot of other companies pull in as a profit margin and then expand that out to Exxon's revenue:

Adobe Systems Incorporated: 23% profit margin (with Exxon level revenues scales to $30.6 billion)
Apple Computer, Inc: 14.5% profit margin(with Exxon level revenues scales $20 billion)
Coach, Inc.: 25% profit margin(with Exxon level revenues scales $34.5 billion)
Colgate-Palmolive Company: 11% profit margin(with Exxon level revenues scales $15.2 billion)
Danaher Corporation: 11.7% profit margin(with Exxon level revenues scales $16 billion)
Qualcomm: 37% profit margin(with Exxon level revenues scales $51 billion)
Stryker Corporation: 14.4% profit margin(with Exxon level revenues scales $20 billion)

yet I don't hear any howls of outrage over their profitability.

[boilinmad]

39. Actually, no,...

...profit margins mean NOTHING to me. All i see, at the end of the day, is a bunch of greedy fucks who are raping the world to get rich. All the business speak is exactly what is wrong with the picture. Money mumbojumbo that confuses the average person, and convinces them that greed is not so bad. Who cares about profit margins? Look at the end figure, thats what counts. Profit means PROFIT!! Oh, and it is a shame that they make such a small profit margin, dont you think?

[melm00se]

42. your "Money mumbojumbo" comment

belies your ignorance and puts you in the category of "you don't know what the hell you are talking about".

books can be your friend, I suggest that you might want to read this one:



and who knows, you might learn something and instead of spouting off drivel like the above you can actually put forth a cogent and informed argument.

[Hannah Bell]

47. average profit margin currently in the neighborhood of 10% & most

businesses get 2-7%. The corps you list are outliers, & not hard to see why.

[melm00se]

48. in the manufacturing sector

US manufacturers average 9.2% (the oil industry, as a whole averages 7.6%).

[Hannah Bell]

49. doesn't look like it to me, maybe you can link me to more recent data.

http://www.referenceforbusiness.com/encyclopedia/Per-Pro/Profit-Margin.html

[Beer Snob-50]

31. these statements in my humble opinion

make there profit margins seem reasonable in contrast to other companies. my big concern is that research and developement is zero for this entire period.

[Hannah Bell]

46. The Profit Margin Paradigm

"Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system and it is not functioning properly." -- Jeremy Grantham

Many investors (including the author) were caught off guard by the economy's surprising earnings growth over the last several years. Earnings of S&P 500 companies have grown more than 20% during the last two years, and they are expected to climb another 8% in 2006. This astonishing growth has exceeded the Gross Domestic Product (GDP), which topped out at 4.6% in 2004 and has grown at a slower rate since. Contrary to common perceptions, corporate earnings growth historically stays in line with GDP growth.

The source of this earnings growth was profit margin expansion (here we define profit margins as corporate profits / GDP), from 7% at the end of the third quarter 2001 to a whopping 10.3% in the latest quarter. As profit margins rise, corporations get to keep more of their sales, leading to improved profitability. To put things in perspective, the average profit margin for corporate America over last 25 years was approximately 8.3%, 200 basis points less than today's average."

(& lower before that; in addition, the "average" is jacked up by some high-fliers like pharma (neighborhood of 10-20%), whose profits are kept high by gov't-enabled monopolistic practices. The majority of businesses get something like 2-7%.)

http://www.fool.com/investing/value/2006/03/01/the-profit-margin-paradigm.aspx.

When average profit margins rise, it means the rich are taking more of surplus production/wealth, & ordinary people & small business are taking less.

[Lint Head]

7. What greedy fuck would not defend his or her money.

That's the way greedy fucks operate. :dem:

[notadmblnd]

8. With that kinda mney going out per second and only 1400.00 come in

.. these companies should be out of business. Or is my math just fucked up?

I answered my ouwn question. they have 1400.00 profit after they spend 19,000 per second.. Well still, that justifies everything:sarcasm:

[The Animator]

9. Profit is money left over after expenses...

Like the difference between gross and net pay on your pay stub. Well, more like what your paycheck looks like after taxes, gas, rent, food, utilities, credit card bills, car and mortgage payments... if there is anything left over after all that... that's profit.

[opihimoimoi]

10. Them figures he used means there is no PROFIT....so the fact is that there REALLY IS PROFITS means

he is lying his ass off....

[radfringe]

12. when you are making profits like that

where's the incentive to produce more oil?

we could turn over every square inch of land to the oil companies and it won't result in more oil because the oil companies won't drill.

while I agree any "one solution" won't address the entire problem, this joker is using it as an excuse. more drilling, conservation, alternative sources or combination of energy sources is NOT in the best interest of the oil companies.

the game currently being played is the same one that Enron played by controlling the supplies and manipulating the market to maximize profits

my tinfoil hat may be on too tight - but does anyone else find it "funny" that within a day or two of bush/mccain calling for off-shore drilling that mccain gets an infusion of cash from the oil companies and prices started dropping? that the Georgia-Russia conflict didn't send the prices skyrocketing (yes they crept up a bit, but not by leaps and bounds)

[Lost4words]

14. I am surprised other industries effected by this graft are nor complaining.

Is the travel industry ready to die for big oil?

what about the auto industry?

food service industry?

stand up you guttless corporate wonders, Big Oil is taking your future away.

8643! ASAP!

[boilinmad]

17. I dont care how much they spend a day....

.., hour, or minute...it's fucking PROFITS we're talking about. They still continue with the smoke and mirrors bullshit, and the dumbed down american public still believes them.

[MasonJar]

21. This is unbelievable. Who is still buying gas from these monsters? DO NOT

BUY THEIR GAS ANYMORE and pass the word.

[high density]

24. So their tax rate is ~25%???

I'm not buying that for a minute!

[classysassy]

26. Greed

"how sweet it is",there is no shame when it comes to greed.

[bdamomma]

29. I hope they choke on that GREED.

[guitar man]

32. can't can't can't can't can't !!!

can't can't can't can't can't can't can't can't can't can't
can't can't can't can't can't can't can't can't can't can't!! :grr:

Sweet jumpin' jaysus, "can't" is all you ever get out of the corporatist crowd and the right wing in general any time there is a genuine problem that needs to be solved in this world. :mad:

"That's a nice pie-in-the-sky dream, but we really can't do that."

Why the fuck not?? Oh yeah, the real answer is "we can't do that and keep feeding the greediest pigs too, so we can't do it."

I'm so goddamn sick of these fucking people I could just run down the street screaming and tearing my hair out!!! :mad:

[Name removed]

33. Deleted message

Message removed by moderator. Click here to review the message board rules.

[unkachuck]

38. exxonmobil....

....defends the undefensible....these greedy, slimy capitalists are screwing us and we're supposed to understand it and like it....

....explain this to me, mr exxonmobil....why is it when the fake price of a barrel of crude goes up, I'll see the fake price increase the next day at my pump?....

....but when the fake price of a barrel of crude goes down, it take weeks for the fake price at the pump to drop....

....why do we have to wait and 'clear' the fake 'high-priced' oil from your fake system as the price of a barrel of crude decreases, but not 'low-priced' oil as the price increases?....

[paparush]

40. First half of 2008, biggest drop in US oil consumption in 26 years.

The fall in US oil consumption in the first half of 2008, reflecting slower economic growth and the impact of high prices, was the largest half-year consumption decline in volume terms in the last 26 years, when, in the first half of 1982, consumption dropped by nearly 800,000 barrels per day (bbl/d).

http://www.finfacts.ie/irishfinancenews/article_1014443.shtml

[4dsc]

41. He's right, most DU'er are missing the whole

Its good to see Tillerson speaking the truth about the coming oil crisis.. Most people are missing the point..

[Hannah Bell]

44. enlighten us.

[Felix Mala]

50. They say the malls in Houston are packed with shoppers.

And multi-million dollar homes barely stay on the market for a week or two.

Hmmmmm....