Exxon posts record $11.68 billion profit

[The Real Messi]

NEW YORK (CNNMoney.com) -- Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.

That profit works out to $1,485.55 a second.

That barely beat the previous corporate record of $11.66 billion, also set by Exxon in the fourth quarter of 2007.

But Exxon (XOM, Fortune 500) profit fell short of Wall Street estimates.

Analysts predicted the company, the world's largest publicly traded oil firm, would make $12.1 billion in profit on $144.4 billion in revenue, according to Thomson Reuters.

Exxon shares fell about 2% in early trading on the New York Stock Exchange.

Excluding money set aside for a recent damage award related to the Valdez tanker spill back in 1989, Exxon made $11.97 billion in the quarter.

Pricey oil cuts both ways
Exxon was both helped and hurt by high oil prices.

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%.

But as a refiner, it must also buy crude oil to turn into gasoline. Exxon actually buys more crude than it sells.

Profits from its refining business totaled $1.6 billion in the quarter, less than half of what they were last year.

"Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs," Exxon said in a statement.

While oil prices in the quarter were nearly twice as high as the same time last year, gasoline prices only rose about 30%.

That's one reason why the stock of major oil companies - such as Exxon, Chevron (CVX, Fortune 500), Royal Dutch Shell (RDSA) and BP (BP) - that both produce and refine crude has been relatively flat over the last year, despite the runup in oil prices.

Meanwhile, shares of companies that mostly produce oil, like Anadarko and Apache, have soared in the last year, while shares in refiners like Valero and Sunoco have tumbled.

Where the money goes
Exxon spent $7 billion in the second quarter finding and producing more new oil, up 38% from last year. Still, oil and natural gas production from the company fell 8%. Even excluding special events such as a labor strike in Nigeria and seizure of fields in Venezuela, production slipped 3%.

The company returned $10.1 billion to shareholders in the form of dividends and stock buybacks, 12% more than last year.

On an earnings-per-share basis, Exxon made $2.22. That was still lower than analysts had expected, but 24% higher than last year, a gain Exxon attributed to its aggressive stock buyback plan.

The big international oil companies have been criticized for plowing much of their profits back into stock buybacks and other programs to benefit shareholders, as opposed to exploring for more oil which could bring down the price of crude for everyone.

"While oil companies are earning record profits and gas prices are soaring, the largest oil companies have invested more resources in stock buybacks than U.S. production," said Congressional Democrats in a press release shortly after Exxon announced its earnings.

Other critics charge the oil companies with deliberately restricting production in an attempt to keep prices high.

The industry says it's investing as much as it can in finding new oil, but is having a hard time given the shortage of workers and equipment in the sector.

Recent efforts by countries such as Russia, Venezuela and Kazakhstan to gain greater control of their own domestic oil resources have also hampered the ability of international oil companies to increase production.

In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called "other taxes."

Political backlash
With Americans paying nearly $4 a gallon for gas, oil company earnings have been political fodder of late.

Congressional Democrats said they are having a conference later in the day to call for an end to tax breaks for big oil firms.

Several bills have been introduced in Congress to enact a "windfall" profits tax on these earnings, or at the very least eliminate manufacturing tax exemption oil companies now enjoy. Presumptive Democratic presidential nominee Barack Obama wants to tax oil companies at a special rate every time crude goes over $80 a barrel.

Most plans would either use this newfound tax money to fund investments in renewable energy, or give it to low income Americans struggling with high energy prices.

But so far those efforts have been blocked - mainly by Republicans - who say raising taxes on oil companies will only discourage investments in finding new oil and raise the price of crude.

First Published: July 31, 2008: 8:09 AM EDT

[The Real Messi]

greed is the root of all evil

[jameznyhc]

drill drill drill

[jameznyhc]

greed is the root of all evil

you realize they but there oil on the open free market from opec and they do not set the price right??? lol .. opec does .. thats why we gotta drill ... also they operate on 8% profit ..most industries operate 20% profit margin ..

[John Kennedy]

you realize they but there oil on the open free market from opec and they do not set the price right??? lol .. opec does .. thats why we gotta drill ... also they operate on 8% profit ..most industries operate 20% profit margin ..

so we can contribute more oil to opec

[jameznyhc]

so we can contribute more oil to opec

so we set our own pricing .. and we wont be dependant on opec .. why would exxon buy from opec when they have there own supply here in the states ..lol

[John Kennedy]

so we set our own pricing .. and we wont be dependant on opec .. why would exxon buy from opec when they have there own supply here in the states ..lol

exxon doesn't buy from opec lol .. exxon owns the drills, they are producers.. small business owners own the retail end and hurt the most, exxon just does marketing for them. We are consumers, opec is in the middle. It's Exxon's job to look for oil and sell to opec and they will continue to.. why wouldn't they? you think they're going to allocate the U.S. drilled oil for the U.S. only? Unless we allow startups to get the contracts to drill and keep them local, it hurts us. We talked about this many times already. Unless you're now supporting socializing oil? Because that's what "setting our own pricing" means. You know that'll never happen, this is America.

Mccain is like a megaphone for the oil companies right now... they tell him they want more land to explore (even though they don't need it.. but $4 a gallon is an opportune time for this marketing campaign), his campaign comes up with the selling point and markets the idea to the American people by telling them it'll help lower prices at the pump and dependence on foreign oil... the clueless American public eats it up. What else is new.

[CraftyVet16]

exxon doesn't buy from opec lol .. exxon owns the drills, they are producers.. small business owners own the retail end and hurt the most, exxon just does marketing for them. We are consumers, opec is in the middle. It's Exxon's job to look for oil and sell to opec and they will continue to.. why wouldn't they? you think they're going to allocate the U.S. drilled oil for the U.S. only? Unless we allow startups to get the contracts to drill and keep them local, it hurts us. We talked about this many times already. Unless you're now supporting socializing oil? Because that's what "setting our own pricing" means. You know that'll never happen, this is America.

Mccain is like a megaphone for the oil companies right now... they tell him they want more land to explore (even though they don't need it.. but $4 a gallon is an opportune time for this marketing campaign), his campaign comes up with the selling point and markets the idea to the American people by telling them it'll help lower prices at the pump and dependence on foreign oil... the clueless American public eats it up. What else is new.

its like beating a dead horse..... no matter how much we drill here... the oil we find will be available for everyone, not just us.... and it will do nothing for the price..... so lets NOT DRILL DRILL DRILL

[jameznyhc]

exxon doesn't buy from opec lol .. exxon owns the drills, they are producers.. small business owners own the retail end and hurt the most, exxon just does marketing for them. We are consumers, opec is in the middle. It's Exxon's job to look for oil and sell to opec and they will continue to.. why wouldn't they? you think they're going to allocate the U.S. drilled oil for the U.S. only? Unless we allow startups to get the contracts to drill and keep them local, it hurts us. We talked about this many times already. Unless you're now supporting socializing oil? Because that's what "setting our own pricing" means. You know that'll never happen, this is America.

Mccain is like a megaphone for the oil companies right now... they tell him they want more land to explore (even though they don't need it.. but $4 a gallon is an opportune time for this marketing campaign), his campaign comes up with the selling point and markets the idea to the American people by telling them it'll help lower prices at the pump and dependence on foreign oil... the clueless American public eats it up. What else is new.

i meant opec wont be setting their price .. we wont be dependant on SA, Iran, Venezuala..our money stops going there .. thats all i care about ...If Obama taxes big oil they pass the price to us..while we make our enemys richer..

[John Kennedy]

i meant opec wont be setting their price .. we wont be dependant on SA, Iran, Venezuala..our money stops going there .. thats all i care about ...If Obama taxes big oil they pass the price to us..while we make our enemys richer..

opec will still be setting their price because they'll still be drilling in other countries too, along with the U.S., and still be giving most of their supplies to opec (if not all, not sure what opec's regulations are for companies) so that they can export it around the world.. why would an exxon cut down and only concentrate on the U.S. market all of a sudden? They are a business.

Take this as an example.. here's a NY Times article from 1993 talking about Mobil winning rights to drill off the coast of Vietnam.. look at how Mobil lobbies to drill.. they don't care about politics.. they want as much land exploration as possible... and it won't affect price or dependence... unless we socialize or make govt restrictions on mid-east oil, or only use oil from local companies even though a global company can supply it for less.. both which seem impossible. The media has us thinking this is the mid-easts fault, but its our politicians fault. Bush goes to SA to "ask" for them to increase production? You weren't insulted by that?

http://query.nytimes.com/gst/fullpag...51C1A965958260

[John Kennedy]

Plus Exxon just planted new drills in Iraq last month, along with a bunch of other global oil companies.. these are the lobbyists that are funding our politicians campaigns and pockets.

Do we think these wars are for oil yet?

[jameznyhc]

Plus Exxon just planted new drills in Iraq last month, along with a bunch of other global oil companies.. these are the lobbyists that are funding our politicians campaigns and pockets.

Do we think these wars are for oil yet?

hey maliki didnt have to grant those contracts at all .. the iraqi govt voted on it.. if you dont believe domestic drilling and refinerires are gonna bring down price your loosing it.. Futures bro ..also think of all the working class labor and skilled jobs were gonna create .. your party is hijacked by enviro -lunatics ..but theres alot of blue dog dems putting mad pressure on pelosi .. i dont see how the current system is ok with you considering your not a dummy lol ..and i know you know higher taxes on "windfal profits" ..its class rhetoric and we'll end up eating those taxes ..lol you think exxon will

[jameznyhc]

we dont have to socialize .. that would be seizing profit, setting price, etc.. we can enforce regualtions that are pro-american and benefit our country ..its the only way this will get done .. we have plenty of regulation favoring "other countries" already ..lets get some favoring us.. thats not socializing

[John Kennedy]

we dont have to socialize .. that would be seizing profit, setting price, etc.. we can enforce regualtions that are pro-american and benefit our country ..its the only way this will get done .. we have plenty of regulation favoring "other countries" already ..lets get some favoring us.. thats not socializing

thank you.. and when they include those regulations in an energy bill, they can include offshore drilling too

Obama is giving the wrong argument and he's sounding dumb on this issue.. blindly supporting the windfall taxes.. and enacting taxes that kick in when oil goes over 80 bucks a gallon.. its as short sighted as the blind drillers (Mccain)... but thats what campaigning is about unfortunately.. quick fixes, easy soundbites, no real solutions.

[John Kennedy]

hey maliki didnt have to grant those contracts at all .. the iraqi govt voted on it.. if you dont believe domestic drilling and refinerires are gonna bring down price your loosing it.. Futures bro ..also think of all the working class labor and skilled jobs were gonna create .. your party is hijacked by enviro -lunatics ..but theres alot of blue dog dems putting mad pressure on pelosi .. i dont see how the current system is ok with you considering your not a dummy lol ..and i know you know higher taxes on "windfal profits" ..its class rhetoric and we'll end up eating those taxes ..lol you think exxon will

of course they would vote on it.. and they should. It's jobs, it's prosperity for their country. So should Exxon go in there and make their money.. they are a business and it's what they should be doing. But the point is they shouldn't be dictating our U.S. policy, and they are. That's the problem.

[jameznyhc]

thank you.. and when they include those regulations in an energy bill, they can include offshore drilling too

Obama is giving the wrong argument and he's sounding dumb on this issue.. blindly supporting the windfall taxes.. and enacting taxes that kick in when oil goes over 80 bucks a gallon.. its as short sighted as the blind drillers (Mccain)... but thats what campaigning is about unfortunately.. quick fixes, easy soundbites, no real solutions.

special interests ruin everything ..

[Defekted]

drill drill drill

you are like a fucking parrot man. Drill Drill Drilll, ahrrrrh, Drill

you constipated? drill
you failing out of school? drill
you cant get it up? drill

You like it simple. Keep it at bumper sticker solutions at all times, otherwise it seems to "aloof" and "unpractical"

too bad the facts get in the way.... drilling will do NOTHING to gas prices. The oil wont come out till 7 or 10 years from now..... and by then china and india demands will ensure that gas prices stay high.......the economic numbers say that drilling in this country will result in "cents" not "dollars" in savings.....

this is purely political....this is gas holidays, this is nonesense..... again, bumper sticker stuff....

my take: it might work.... this country has ALOT of people that love 4 letter words repeated over and over, makes things easy.

[Benny B]

you are like a fucking parrot man. Drill Drill Drilll, ahrrrrh, Drill

you constipated? drill
you failing out of school? drill
you cant get it up? drill

You like it simple. Keep it at bumper sticker solutions at all times, otherwise it seems to "aloof" and "unpractical"

too bad the facts get in the way.... drilling will do NOTHING to gas prices. The oil wont come out till 7 or 10 years from now..... and by then china and india demands will ensure that gas prices stay high.......the economic numbers say that drilling in this country will result in "cents" not "dollars" in savings.....

this is purely political....this is gas holidays, this is nonesense..... again, bumper sticker stuff....

my take: it might work.... this country has ALOT of people that love 4 letter words repeated over and over, makes things easy.

like ive said before... i dont think "price" is the issue. The biggest issue that we have with oil is the national security threat we have. would you oppose drilling here offshore / anwr etc if they said.. we need to do this because of the national security threat we face??? you cant argue that we need to reduce our foreign dependence on oil.. i wont argue we need to come up with alternatives etc. yet at the same time we are working on new sources we also need to reduce the threat we have because of how much we import. what happens if israel strikes against iran and iran shuts down the straight where i think its like 70-80% of oil comes through??? and prices go to 300 / barrel??? you gonna sit there saying shit guess we should have drilled our own oil???? why not do it now????

[Benny B]

and btw.. your 7-10 years.. i dont agree with at all.. and even if thats the case.. would you rather be 7-10 years from now.. or 7-10 years from tomorrrow???

[Defekted]

like ive said before... i dont think "price" is the issue. The biggest issue that we have with oil is the national security threat we have. would you oppose drilling here offshore / anwr etc if they said.. we need to do this because of the national security threat we face??? you cant argue that we need to reduce our foreign dependence on oil.. i wont argue we need to come up with alternatives etc. yet at the same time we are working on new sources we also need to reduce the threat we have because of how much we import. what happens if israel strikes against iran and iran shuts down the straight where i think its like 70-80% of oil comes through??? and prices go to 300 / barrel??? you gonna sit there saying shit guess we should have drilled our own oil???? why not do it now????

We are still going to need to import oil from the same exact places. There is no shot we can be energy independent from drilling. It will be a drop in the bucket. we arent conserving as a nation, our appetite grows and grows, we are about 4% of the worlds population but take 25% of the oil, and thats growing, plus china and india and the world by in large...... all going in the same direction...... we are missing the ball....

Id rather focus completely on alternative fuels and make it happen cause it can happen, we have dont things far more science fiction than that, so i have no doubts.

Id rather have that than these ugly fucking drills off all our shores destroying our beach views and having the possibility of spills like in Cali 30 years ago...... Have you ever swam in the pacific and saw those things out there? i mean its hideous.... and thats just the cosmetic aspect of this arguement...... on top of the fact its just not a solution....

so i think we should focus on alternative energy, which could possibly be the next boom industry like the Information Technology boom of the last 30 years which has generated trillions and countless of jobs. Lets be that leader. Fuck drilling for peanuts. Lets get this done right now, not tomorrow as you say.