Record Profits, But What Margin?

The big news today is Exxon Mobile's recent SEC filing reporting 3Q earnings. "RECORD OIL PROFITS" says the Daily Press of Hampton Roads, Va.(dead tree only). Politicians are complaining and suggesting additional taxes. But wait a minute, total dollar profit is meaningless without understanding capitalization and revenues. I'm too lazy to look up all the other important financial data for a bunch of companies, but I'd like to point out Fortune's Global 500. More specifically the global 100 since I seem to need a Fortune subscription to get the other 400.

Exxon Mobile posted a profit of $9.92 billion on revenues of $100.717 billion for a margin of 9.85%. This is a respectable number by all accounts, but it is hardly anything earth-shattering, and the margin has not increased noticeably from past financial periods. From the Fortune Global 500 data, financial services company Bank of America is getting margins of 22.3%, General Electric had 11%, and Proctor & Gamble comes in with 12.61%. Big Pharma does quite well with Pfizer at 21.5%.

If Big Oil is somehow unfairly profiting from recent disasters, we would expect that margins would increase considerably, but this is not the case. Instead what we see is that Exxon Mobile has increased costs and capital expenditures that offset any additional profit. There are things that Exxon Mobile and other Big Oil companies can be criticized for, windfall profits isn't one of them.

Tabulated data from the Global 100 on page 2.

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Rank Company revenue profit margin
1 Wal-Mart Stores    287,989.00 10,267.00 align="right">3.57%
2 BP   285,059.00 15,371.00 align="right">5.39%
3 Exxon Mobil   270,772.00 25,330.00 align="right">9.35%
4 Royal Dutch/Shell Group   268,690.00 18,183.00 align="right">6.77%
5 General Motors   193,517.00 2,805.00 align="right">1.45%
6 DaimlerChrysler   176,687.50 3,067.10 align="right">1.74%
7 Toyota Motor   172,616.30 10,898.20 align="right">6.31%
8 Ford Motor   172,233.00 3,487.00 align="right">2.02%
9 General Electric   152,866.00 16,819.00 align="right">11.00%
10 Total   152,609.50 11,955.00 align="right">7.83%
11 Chevron   147,967.00 13,328.00 align="right">9.01%
12 ConocoPhillips   121,663.00 8,129.00 align="right">6.68%
13 AXA   121,606.30 3,133.00 align="right">2.58%
14 Allianz   118,937.20 2,735.00 align="right">2.30%
15 Volkswagen   110,648.70 842 align="right">0.76%
16 Citigroup   108,276.00 17,046.00 align="right">15.74%
17 ING Group   105,886.40 7,422.80 align="right">7.01%
18 Nippon Telegraph &
Telephone  
100,545.30 6,608.00 align="right">6.57%
19 American Intl. Group   97,987.00 9,731.00 align="right">9.93%
20 Intl. Business Machines   96,293.00 8,430.00 align="right">8.75%
21 Siemens   91,493.20 4,144.60 align="right">4.53%
22 Carrefour   90,381.70 1,724.80 align="right">1.91%
23 Hitachi   83,993.90 479.2 align="right">0.57%
24 Assicurazioni Generali   83,267.60 1,635.10 align="right">1.96%
25 Matsushita Electric
Industrial  
81,077.70 544.1 align="right">0.67%
26 McKesson   80,514.60 -156.7 align="right">-0.19%
27 Honda Motor   80,486.60 4,523.90 align="right">5.62%
28 Hewlett-Packard   79,905.00 3,497.00 align="right">4.38%
29 Nissan Motor   79,799.60 4,766.60 align="right">5.97%
30 Fortis   75,518.10 4,177.20 align="right">5.53%
31 Sinopec   75,076.70 1,268.90 align="right">1.69%
32 Berkshire Hathaway   74,382.00 7,308.00 align="right">9.82%
33 ENI   74,227.70 9,047.10 align="right">12.19%
34 Home Depot   73,094.00 5,001.00 align="right">6.84%
35 Aviva   73,025.20 1,936.80 align="right">2.65%
36 HSBC Holdings   72,550.00 11,840.00 align="right">16.32%
37 Deutsche Telekom   71,988.90 5,763.60 align="right">8.01%
38 Verizon Communications   71,563.30 7,830.70 align="right">10.94%
39 Samsung Electronics   71,555.90 9,419.50 align="right">13.16%
40 State Grid   71,290.20 694 align="right">0.97%
41 Peugeot   70,641.90 1,687.80 align="right">2.39%
42 Metro   70,159.30 1,028.60 align="right">1.47%
43 Nestlé   69,825.70 5,405.40 align="right">7.74%
44 U.S. Postal Service   68,996.00 3,065.00 align="right">4.44%
45 BNP Paribas   68,654.40 5,805.90 align="right">8.46%
46 China National Petroleum   67,723.80 8,757.10 align="right">12.93%
47 Sony   66,618.00 1,524.50 align="right">2.29%
48 Cardinal Health   65,130.60 1,474.50 align="right">2.26%
49 Royal Ahold   64,675.60 -542.3 align="right">-0.84%
50 Altria Group   64,440.00 9,416.00 align="right">14.61%
51 Pemex   63,690.50 -2,258.90 align="right">-3.55%
52 Bank of America Corp.   63,324.00 14,143.00 align="right">22.33%
53 Vodafone   62,971.40 -13,910.40 align="right">-22.09%
54 Tesco   62,458.70 2,511.30 align="right">4.02%
55 Munich Re Group   60,705.50 2,279.80 align="right">3.76%
56 Nippon Life Insurance   60,520.80 1,886.30 align="right">3.12%
57 Fiat   59,972.90 -1,972.60 align="right">-3.29%
58 Royal Bank of Scotland   59,750.00 8,267.40 align="right">13.84%
59 Zurich Financial Services   59,678.00 2,587.00 align="right">4.33%
60 Crédit Agricole   59,053.80 4,936.50 align="right">8.36%
61 Credit Suisse   58,825.00 4,529.00 align="right">7.70%
62 State Farm Insurance Cos   58,818.90 5,308.60 align="right">9.03%
63 France Télécom   58,652.10 3,462.60 align="right">5.90%
64 Électricité De
France  
58,367.20 1,667.90 align="right">2.86%
65 J.P. Morgan Chase & Co.   56,931.00 4,466.00 align="right">7.84%
66 UBS   56,917.80 6,509.50 align="right">11.44%
67 Kroger   56,434.40 -100 align="right">-0.18%
68 Deutsche Bank   55,669.50 3,074.60 align="right">5.52%
69 E.ON   55,652.10 5,396.70 align="right">9.70%
70 Deutsche Post   55,388.40 1,975.10 align="right">3.57%
71 BMW   55,142.20 2,763.60 align="right">5.01%
72 Toshiba   54,303.50 428.4 align="right">0.79%
73 Valero Energy   53,918.60 1,803.80 align="right">3.35%
74 AmerisourceBergen   53,179.00 468.4 align="right">0.88%
75 Pfizer   52,921.00 11,361.00 align="right">21.47%
76 Boeing   52,553.00 1,872.00 align="right">3.56%
77 Procter & Gamble   51,407.00 6,481.00 align="right">12.61%
78 RWE   50,951.90 2,657.90 align="right">5.22%
79 Suez   50,670.10 2,244.20 align="right">4.43%
80 Renault   50,639.70 4,416.60 align="right">8.72%
81 Unilever   49,960.70 2,333.30 align="right">4.67%
82 Target   49,934.00 3,198.00 align="right">6.40%
83 Robert Bosch   49,759.20 1,950.20 align="right">3.92%
84 Dell   49,205.00 3,043.00 align="right">6.18%
85 ThyssenKrupp   48,756.10 1,100.30 align="right">2.26%
86 Costco Wholesale   48,107.00 882.4 align="right">1.83%
87 HBOS   47,755.70 5,601.40 align="right">11.73%
88 Johnson & Johnson   47,348.00 8,509.00 align="right">17.97%
89 Prudential   47,055.80 765.9 align="right">1.63%
90 Tokyo Electric Power   46,962.70 2,104.50 align="right">4.48%
91 BASF   46,686.60 2,342.00 align="right">5.02%
92 Hyundai Motor   46,358.20 1,472.60 align="right">3.18%
93 Enel   45,530.40 3,522.30 align="right">7.74%
94 Marathon Oil   45,444.00 1,261.00 align="right">2.77%
95 Statoil   45,440.00 3,697.30 align="right">8.14%
96 NEC   45,175.50 631.5 align="right">1.40%
97 Repsol YPF   44,857.50 2,425.30 align="right">5.41%
98 Dai-ichi Mutual Life
Insurance  
44,468.80 1,301.70 align="right">2.93%
99 Fujitsu   44,316.00 296.9 align="right">0.67%
100 Time Warner   42,869.00 3,364.00 align="right">7.85%
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have you seen this gem yet?

have you seen this gem yet? Interesting comparison between government tax revenues, and oil industry profit.

guess what?

Government tax revenues (on gas tax alone) have exceeded Oil industry profits pretty much every year for the period in study (1977-present). From the source: "[S]ince 1977, governments collected more than $1.34 trillion, after adjusting for inflation [in 2004 dollars], in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period. "

Your so right,

Your so right, 10,000,000,000 dollars doesn't buy what it used to. That's why I need even more money. Yummy! I own quite a bit of oil stock myself. It's doing real well, thank you very much. It's called DIVERSIFICATION, folks. My buddy Buffett taught me about that. Thank you all for seeing things my way and for using my software. Btw, what version of Windows are you currently running? I made a few buck off of you, ha, ha. I don't mean to brag, but I have a saying "I've been rich and I've been poor, and rich is better."

"There are things that Exxon Mobile and other Big Oil companies
can be criticized for, windfall profits isn't one of them."

I can't, for the life of me, imagine what you are talking about. Exxon cleaned up that messy oil spill off the coast of Alaska many years ago. It didn't even get close to Washington State where I live. If you all choose to drive a SUV gas guzzler, it's your God-given right to do so. It's called FREEDOM buddy and nobody's taking it away from ME. I thought you libertarians knew a thing or two about individual freedom. I've got armed bodyguards, in case you were unaware, to protect me from the hicks and other riff-raff running rampant in this country. I have to protect myself from the million of poor people and some lefties who want to take my hard-earned billions away from me. Get a job, dude, and start your own damn software company. That's the American Way. I

Btw, what version of Windows

Btw, what version of Windows are you currently running?
Xorg X11 6.8.2, because anything other than X is just a Xerox copy.

Do you have a point?

Dave, You are one the right

Dave,

You are one the right track here, but take it one step further. Has the net profit margin changed? If the net profit margins have increased significantly, then there is a story. Some have gone up, but not dramatically, some have gone down, but not dramatically, some have stayed about the same. But come on, saying costs are up $14 billion at Chevron is not as sexy.

How Much Profit Is Too

How Much Profit Is Too Much?
Lynne Kiesling Last week's quarterly earnings announcements made for a lot of wailing and tooth-gnashing about the profits of oil companies. I was too buried in other things to opine, but others said smart and useful things. Take, for example,...