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banyon
08-02-2008, 10:03 AM
Exxon's second-quarter profit breaks its own record

http://www.latimes.com/news/nationworld/washingtondc/la-fi-exxon1-2008aug01,0,5221267.story

The oil giant brings in $11.68 billion, the largest profit for a U.S. company, and still fails to meet analysts' expectations. Critics say Exxon and others aren't doing enough to reduce gas prices.

By Elizabeth Douglass and Richard Simon, Los Angeles Times Staff Writers
August 1, 2008

Exxon Mobil Corp. posted second-quarter earnings Thursday of $11.68 billion, once again topping its own record for the biggest three-month profit ever by a U.S. corporation.

Still, the massive income at the world's largest publicly traded oil company pleased hardly anyone. Production fell during the quarter, and financial analysts had been expecting better earnings -- two factors that helped push the company's stock down $3.95, or 4.7%, to $80.43 a share.

Activists renewed their complaints that Exxon and other oil companies weren't investing enough to find new oil that would bring pump prices down, instead preferring to drill for wealth on Wall Street by purchasing their own stock.

In the quarter that ended June 30, the Irving, Texas, oil giant spent $8 billion buying back shares of its stock, compared with the $7 billion Exxon invested in exploration and other projects. The company also paid stockholders dividends worth $2.1 billion during the period.

"Exxon is pumping cash, not oil," said Judy Dugan, research director at Consumer Watchdog, based in Santa Monica. "The big oil companies are wallowing in cash, and Exxon is the most aggressive in buying back its stock instead of taking the risks it should to both find new oil and develop new forms of energy."

The company said its capital outlay was 38% higher than in the second quarter of 2007.

"We're investing in any project that we have ready for funding. We do that first. Then the money that's earned in our business is the shareholders' money, and we return it to the shareholders," Exxon Vice President Henry Hubble said in a conference call with reporters. "We'd like to do more" to increase energy supplies and would do more if the company had access to off-limits areas, he said.

Royal Dutch Shell also reported second-quarter earnings Thursday, posting 33% higher profit of $11.6 billion. The Anglo-Dutch company said that Nigerian unrest damped production during the quarter and that its net investment in projects totaled $5.7 billion. Shell gave $3.8 billion back to shareholders through stock repurchases and dividends during the quarter.

This week London's BP and ConocoPhillips of Houston also reported sharply higher second-quarter profits. Chevron Corp. -- rounding out the list of the so-called Big Five oil firms -- is expected to follow suit when it releases results today.

Rep. Edward J. Markey (D-Mass.), chairman of the House Select Committee on Energy Independence and Global Warming, complained Thursday that the companies were on track to collect a combined $160 billion in profit this year, up from $123 billion in 2007.

Critics have denounced the oil industry for reaping high profits while consumers struggle with record fuel prices.

With fuel costs weighing on household budgets and the economy, some politicians have blamed oil company greed and market speculation, while others have pointed to policies that prevent new drilling along key coastal regions.

Democrats have stepped up their push to repeal billions of dollars in oil industry tax breaks. The party's political strategists -- emboldened by a CNN/Opinion Research poll finding that 68% of respondents consider U.S. oil companies a major culprit behind high gasoline prices -- prepared to highlight oil company profits on the campaign trail in a new round of attacks against industry-friendly Republicans.

"These oil companies cannot continue to earn these profits, spend a pittance on renewable fuels to move America beyond oil and then block any efforts to shift billions in tax breaks to companies trying to bring about the next generation of clean energy," Markey said.

Republicans, citing growing public support for more domestic energy exploration, have put Democratic leaders on the defensive for resisting an up-or-down vote on lifting the offshore-drilling ban.

Sen. Judd Gregg (R-N.H.), speaking on the Senate floor in support of expanded drilling, said, "Yes, the oil companies are making some big profits. . . . When they're not spending it to look for oil, they're paying it for dividends. And who gets those dividends? I suspect they're Americans, Americans who invest in pension funds."

Exxon's second-quarter net income was 14% higher than the $10.26 billion it earned in the same quarter last year. The per-share profit was $2.22, up from $1.83 a year earlier, but short of the average of $2.52 a share expected by analysts polled by Thomson Financial.

Second-quarter revenue totaled $138 billion, up 40%.

The company's flagship business -- exploring for, producing and selling crude oil and natural gas -- led the charge, as sharply higher prices pushed profit up 68% in the quarter, to $10 billion. Exxon said it received an average of $119.31 per barrel of oil sold during the quarter, nearly double the average price in 2007.

Refining and marketing profit for the quarter totaled $1.6 billion, down 54%, largely because of declining U.S. sales.

Total worldwide production fell 8%, to the equivalent of 2.4 million barrels a day. After removing the effects of a strike in Nigeria, the loss of Venezuelan production taken over by the government and price-related contract adjustments, Exxon's worldwide production fell 3%.

wazu
08-02-2008, 10:18 AM
Those BASTARDS! Flaunting their massive 8% profit margin like that! I wish there were no oil companies. Greedy, capitalist, pigs.

Programmer
08-02-2008, 10:38 AM
Reinvesting?

How many new refineries have been added to those already operating in the U.S?

IIRC, none in the past 26+ years?

They aren't investing in the future, they are investing for the larger profits from limited supply.

irishjayhawk
08-02-2008, 11:19 AM
Those BASTARDS! Flaunting their massive 8% profit margin like that! I wish there were no oil companies. Greedy, capitalist, pigs.

For some reason, profit margins always irked me. Reason being: they're always easy to fudge.

A little severance package for a CEO keeps the profit margin down. An investment in some - perhaps bogus, perhaps not - company keeps the margin down.

All the while, people keep defending the gas/oil companies because of their profit margins.

wazu
08-02-2008, 11:25 AM
For some reason, profit margins always irked me. Reason being: they're always easy to fudge.

A little severance package for a CEO keeps the profit margin down. An investment in some - perhaps bogus, perhaps not - company keeps the margin down.

All the while, people keep defending the gas/oil companies because of their profit margins.

Okay, so assuming they are being completely underhanded and somehow cooking the books to show smaller margin while reporting all of the information publicly, what are we looking at - 10%? Doesn't Oracle make something like a 35% margin?

To quote raw profit numbers makes no sense. A company that is large enough will have large raw numbers even with a 1% margin. That doesn't mean they don't have the risk of a -1% margin at sometime in the future that would be equally huge.

I'm all for eliminating whatever special tax breaks supposedly still exist for oil companies, but I can't find fault with the fact they are making a profit providing a critical service for the American economy. They aren't the enemy, government is.

Nightfyre
08-02-2008, 12:03 PM
Okay, so assuming they are being completely underhanded and somehow cooking the books to show smaller margin while reporting all of the information publicly, what are we looking at - 10%? Doesn't Oracle make something like a 35% margin?

To quote raw profit numbers makes no sense. A company that is large enough will have large raw numbers even with a 1% margin. That doesn't mean they don't have the risk of a -1% margin at sometime in the future that would be equally huge.

I'm all for eliminating whatever special tax breaks supposedly still exist for oil companies, but I can't find fault with the fact they are making a profit providing a critical service for the American economy. They aren't the enemy, government is.
my sentiments exactly.

Ultra Peanut
08-02-2008, 12:04 PM
These companies NEED those tax rebates! We can't allow a dime of this money slip back into the hands of average Americans!

banyon
08-02-2008, 12:45 PM
Those BASTARDS! Flaunting their massive 8% profit margin like that! I wish there were no oil companies. Greedy, capitalist, pigs.

If I developed a soft drink to compete with Coca Cola and managed to make it so popular (or I bought up all of the other soft drink companies) and sold my product at the rate of one drink per day to every person on the planet at a 1% profit margin, I'd be the richest company in the history of civilization, probably by a factor of 100 or so.

banyon
08-02-2008, 12:47 PM
To quote raw profit numbers makes no sense. A company that is large enough will have large raw numbers even with a 1% margin. That doesn't mean they don't have the risk of a -1% margin at sometime in the future that would be equally huge.

Yeah, LA Times, what were you thinking? They must have a bunch of R-tards at their business desk.


Those kids with their lemonade stand selling the stuff for a 200-300% profit margin are where the real money is at.

Profit is profit. It's not per capita, you get to keep all of it.

Ari Chi3fs
08-02-2008, 12:48 PM
I like how they have spent that 15 billion in the past 2 quarters buying back stock instead of looking for alternatives for a better fuel for America.

I NEVER buy Exxxxxon gas. **** you Rockefellers and Standard OIL! You Nazi supporting bastards!

Look it up. I hate this company.

wazu
08-02-2008, 01:04 PM
If I developed a soft drink to compete with Coca Cola and managed to make it so popular (or I bought up all of the other soft drink companies) and sold my product at the rate of one drink per day to every person on the planet at a 1% profit margin, I'd be the richest company in the history of civilization, probably by a factor of 100 or so.

So what? Does that mean you should have your profits taken away and given to people who did nothing to earn it? If you are operating a 1% profit margin business, you better also be ready to report losses when times aren't so good. Since the government confiscated your obscene 1% profit earlier, should they now make up the difference via subsidy just to make it fair?

HonestChieffan
08-02-2008, 01:15 PM
Profit is evil. All profit is bad. No one should be allowed a profit.

banyon
08-02-2008, 01:25 PM
So what? Does that mean you should have your profits taken away and given to people who did nothing to earn it? If you are operating a 1% profit margin business, you better also be ready to report losses when times aren't so good. Since the government confiscated your obscene 1% profit earlier, should they now make up the difference via subsidy just to make it fair?

1% profit margin is not 1% profit, that's the problem you are having.

The profit margin is mostly used for internal comparison. It is difficult to accurately compare the net profit ratio for different entities. Individual businesses' operating and financing arrangements vary so much that different entities are bound to have different levels of expenditure, so that comparison of one with another can have little meaning. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss.
For example, a company produces a loaf of bread and sells it for 10 units of currency. It cost the company 6 units of currency to produce the bread and it also had to pay an additional 2 units of currency in tax.

That makes the company's net income 2 units of currency (10 - 6, before tax, then minus 2 for tax). Since its revenue is 10 units of currency, the profit margin would be (2 / 10) or 20%.

Profit margin is an indicator of a company's pricing policies and its ability to control costs. Differences in competitive strategy and product mix cause the profit margin to vary among different companies

http://en.wikipedia.org/wiki/Profit_margin

i.e., not it's gross profitability and how much its investors are making.

If you really believe that profit margin is the important indicator as to how much money a company is making, you are free to put your money where your mouth is. Here's a list of the companies on the NYSE with the highest current profit margins. If you are correct, you should immediately invest heavily in them:


http://moneycentral.msn.com/investor/finder/results.asp?Cust=1&Net+Profit+Margin=High

I will warn you though, you will probably be throwing that money into the toilet if you do so.

Let's try it this way too:

If I am owner of XYZ corp and I have one store I am making $100 k a year at that location in profits. I sell 100 units of my product per year (cars perhaps) for a total of $1 mil in sales, so my profit margin is 10%.

Now I can buy location #2, it is not as premium a location, but it will do okay. Thus my overhead compared to my sales is not as good. Now in year two I sell 60 units at the new location and 100 again at the old location. My net profit is now $140k (minus the extra overhead), I did 1.6$mil in sales and my profit margin is down to 8.75%. Am I worse off? Hell no, I made 40k more than I did last year.

From the consumer's point of view though, Joe Q used to own location #2 and compete with me. Prices may be higher (indeed I may have increased them to offset part of my puchase price) and they may not get as great of deals. In year 3, I may buy the last remaining car lot at location #3 and am free to raise my prices for a hefty markup with most of my competition out of the way. Anyway, as I do these things, profit margin will be much less important to me than net profits, since that's what I will actually live on.

banyon
08-02-2008, 01:27 PM
Profit is evil. All profit is bad. No one should be allowed a profit.

Yeah, that's in this thread. http://ncaabbs.com/images/smilies/01-wingedeagle.gif

KILLER_CLOWN
08-02-2008, 01:43 PM
<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/NbakN7SLdbk&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/NbakN7SLdbk&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

part 1 of an 8 part series well worth watching. This man has been around and accurate since the 80's and is now saying from on high that oil will soon be $50 a barrel which will collapse our economy.

Thig Lyfe
08-02-2008, 01:56 PM
Profit is evil. All profit is bad. No one should be allowed a profit.

You must be one of those people who fills his gas tank with magic.

I don't understand how ANYBODY could be pro-Exxon. They're making record profits, and yet you still have to pay $4 a gallon. You're not the least bit incensed by the fact that the rich get richer while you're spending more money than ever just to get to work?

HonestChieffan
08-02-2008, 02:01 PM
Isnt the job of corporations to make money for shareholders? If you have a gripe it should be with congress for limiting the supply.

banyon
08-02-2008, 02:02 PM
You must be one of those people who fills his gas tank with magic.

I don't understand how ANYBODY could be pro-Exxon. They're making record profits, and yet you still have to pay $4 a gallon. You're not the least bit incensed by the fact that the rich get richer while you're spending more money than ever just to get to work?

http://farm1.static.flickr.com/77/190545745_cbe1e6b36f.jpg?v=0

splatbass
08-02-2008, 02:11 PM
Isnt the job of corporations to make money for shareholders? If you have a gripe it should be with congress for limiting the supply.

What limited supply? I remember in the 70s when there was a shortage and we had long lines at the pump, and stations running out of gas. We don't have that now. The price of oil is inflated due to market speculation, not due to lack of supply.

wazu
08-02-2008, 02:29 PM
You're not the least bit incensed by the fact that the rich get richer while you're spending more money than ever just to get to work?

I am incensed that our government doesn't have the sense to get out of their way. As it stands, without these companies supplying the market with gasoline, I would be riding a bicycle to work, which would mean about 30 miles a day of riding my bike, which would suck.

My point is - why not go ahead and open up the outer continental shelf and ANWAR? C'mon Democrats - DO IT! If it doesn't work, you can just point it out as another failed Bush policy and what have we lost? Nothing. The only losers would be the oil companies who would pay for leases that yield no oil and therefore make them no money.

Nightfyre
08-02-2008, 02:35 PM
I will warn you though, you will probably be throwing that money into the toilet if you do so.

Let's try it this way too:

If I am owner of XYZ corp and I have one store I am making $100 k a year at that location in profits. I sell 100 units of my product per year (cars perhaps) for a total of $1 mil in sales, so my profit margin is 10%.

Now I can buy location #2, it is not as premium a location, but it will do okay. Thus my overhead compared to my sales is not as good. Now in year two I sell 60 units at the new location and 100 again at the old location. My net profit is now $140k (minus the extra overhead), I did 1.6$mil in sales and my profit margin is down to 8.75%. Am I worse off? Hell no, I made 40k more than I did last year.

From the consumer's point of view though, Joe Q used to own location #2 and compete with me. Prices may be higher (indeed I may have increased them to offset part of my puchase price) and they may not get as great of deals. In year 3, I may buy the last remaining car lot at location #3 and am free to raise my prices for a hefty markup with most of my competition out of the way. Anyway, as I do these things, profit margin will be much less important to me than net profits, since that's what I will actually live on.
Yeah, because I'm sure its possible to have more after-tax income than revenue, which is what your stupid ass link showed. :shake: I guess that shows what you really know about finance, eh?

Look, your story here does not account for the fact that you had to take on more risk to get that extra 40k. In fact, that investment yields only 6.7% at a relatively high risk. So really, you've shot yourself in the foot by making this investment and not dropping your dollars into say,a money market fund or some risk free asset yielding ~5%.

In addition, by raising prices in year 3, you increase the reward for someone to enter the market and underprice you.

Net Profit in dollars has no proportionality to it. That is why you turn it into a percentage to see what kind of return the company is getting based on the overall dollars they have invested.

Exxon in 2007 had a return on equity of 34.5%. An excellent number, but by no means is it disgusting. Nike had a 25.4%; IBM had a 50.7%. So you see, YOU'RE WRONG. Because Return on Equity is, IMO, one of the true measures of how a company is performing for their shareholder, assuming they properly balance their liabilities. Exxon is amazingly average. having a beta of .95, and far below average Operating margins of 9.2% in 2007. nike had a beta of .82 and a HIGHER operating margin of 10.17%. ibm had a beta of .97 and an operating margin of 10.93%. So tell me again how exxon is getting windfall profits?

Nightfyre
08-02-2008, 02:36 PM
http://farm1.static.flickr.com/77/190545745_cbe1e6b36f.jpg?v=0

I think I've proven who the real sheep of this thread is.

banyon
08-02-2008, 02:45 PM
Yeah, because I'm sure its possible to have more after-tax income than revenue, which is what your stupid ass link showed. :shake: I guess that shows what you really know about finance, eh?

Look, your story here does not account for the fact that you had to take on more risk to get that extra 40k. In fact, that investment yields only 6.7% at a relatively high risk. So really, you've shot yourself in the foot by making this investment and not dropping your dollars into say,a money market fund or some risk free asset yielding ~5%.

In addition, by raising prices in year 3, you increase the reward for someone to enter the market and underprice you.

Net Profit in dollars has no proportionality to it. That is why you turn it into a percentage to see what kind of return the company is getting based on the overall dollars they have invested.

Exxon in 2007 had a return on equity of 34.5%. An excellent number, but by no means is it disgusting. Nike had a 25.4%; IBM had a 50.7%. So you see, YOU'RE WRONG. Because Return on Equity is, IMO, one of the true measures of how a company is performing for their shareholder, assuming they properly balance their liabilities. Exxon is amazingly average. having a beta of .95, and far below average Operating margins of 9.2% in 2007. nike had a beta of .82 and a HIGHER operating margin of 10.17%. ibm had a beta of .97 and an operating margin of 10.93%. So tell me again how exxon is getting windfall profits?

The point of that post was to show that profit margin isn't as relevant as Adam made it out to be. It sounds like you agree. You also did nothing to address my point that net profits aren't divided up per capita, you get to kep all of them.

How about this question? Are corporate and executive compensation part of profits?

http://www.pacificviews.org/weblog/archives/images/lee_raymond.jpg

banyon
08-02-2008, 02:46 PM
I think I've proven who the real sheep of this thread is.

You may want to make more than one post before you spike the ball on the ten yard line. ;)

From your posts yesterday, it seems you haven't had that course covering monopolistic pressures in markets yet. I posted some pretty solid data about this market and you just said "blah, blah, blah" as if that was some kind of answer.

Nightfyre
08-02-2008, 02:52 PM
You may want to make more than one post before you spike the ball on the ten yard line. ;)

From your posts yesterday, it seems you haven't had that course covering monopolistic pressures in markets yet. I posted some pretty solid data about this market and you just said "blah, blah, blah" as if that was some kind of answer.

In order for a monopoly to exist , it must be satisfying the market. Welcome to basic microeconomics!

banyon
08-02-2008, 02:56 PM
In order for a monopoly to exist , it must be satisfying the market. Welcome to basic microeconomics!

Whoa. Sounds like it's time you took some macro classes then.

Nightfyre
08-02-2008, 02:59 PM
The point of that post was to show that profit margin isn't as relevant as Adam made it out to be. It sounds like you agree. You also did nothing to address my point that net profits aren't divided up per capita, you get to kep all of them.
Let's address that. XOM IS HUGE AND HAS 5.09 BILLION shares outstanding. IBM has 1.35 and nike has 490 million. HUGE COMPANY = HUGE REVENUES? YOU DONT SAY!

How about this question? Are corporate and executive compensation part of profits?

http://www.pacificviews.org/weblog/archives/images/lee_raymond.jpg
In what respect? Compensation is often given in options in order to create incentive based packages. I'd assume they must set aside a certain amount of shares at the beginning of the contract as a liability and then amortize them over the life of the contract. At least, that is how I would approach it from an accounting standpoint. In this respect, their compensation expense would be distributed across the life of their contract.

Nightfyre
08-02-2008, 03:00 PM
Whoa. Sounds like it's time you took some macro classes then.

Sounds like time you actually studied economics to me.

banyon
08-02-2008, 03:15 PM
Sounds like time you actually studied economics to me.

Look, if you think this snippy crap is helpful to your argument, I guess continue. I've probably had just as many hours of Econ as you, unless you have a graduate degree in it, so you can cut the BS.


Your original statement that "In order for a monopoly to exist, it must be satisfying the market" is really just an oversimplification."

First, off, this makes it sound like there are no pernicious effects created by monopolistic or oligopolistc situations, which is just flatly wrong.

Secondly, when we are dealing with an inelastic good (and in our society I don't think there's any doubt that refined crude is inelastic), then "satisfying the market" is really just a hollow phrase. What you mean is that "demand exists for the product", which for an inelastic good with no readily available substitutes will always be the case.

So, Exxon isn't doing anything wonderful by bringing me oil. I don't have any practical alternatives right now except to buy their (or one of their increasingly few competitor's) product. It is precisely in situations with inelastic goods where monopolistic and oligopolistic pressures can do the most harm, as they are doing now to consumers across the country.

banyon
08-02-2008, 03:17 PM
Let's address that. XOM IS HUGE AND HAS 5.09 BILLION shares outstanding. IBM has 1.35 and nike has 490 million. HUGE COMPANY = HUGE REVENUES? YOU DONT SAY!

Standard Oil was a huge company too, making record profits. Then we broke it up and our country was able to develop into an industrial power.

In what respect? Compensation is often given in options in order to create incentive based packages. I'd assume they must set aside a certain amount of shares at the beginning of the contract as a liability and then amortize them over the life of the contract. At least, that is how I would approach it from an accounting standpoint. In this respect, their compensation expense would be distributed across the life of their contract.

The easy way to say this is "it's a cost". Therefore they can reward themselves as richly as they desire and show only the after compensation profit margin to the public.

HonestChieffan
08-02-2008, 03:17 PM
Exxon is 3% of the gloabl market.

3% is not a monopoly.

banyon
08-02-2008, 03:19 PM
Exxon is 3% of the gloabl market.

3% is not a monopoly.

Shhh... The adults are talking.

Here's a cup and ball to play with:

http://www.woodchuckshop.com/photos/products/Cup-and-ball-game.JPG

Nightfyre
08-02-2008, 03:21 PM
Look, if you think this snippy crap is helpful to your argument, I guess continue. I've probably had just as many hours of Econ as you, unless you have a graduate degree in it, so you can cut the BS.


Your original statement that "In order for a monopoly to exist, it must be satisfying the market" is really just an oversimplification."

First, off, this makes it sound like there are no pernicious effects created by monopolistic or oligopolistc situations, which is just flatly wrong.

Secondly, when we are dealing with an inelastic good (and in our society I don't think there's any doubt that refined crude is inelastic), then "satisfying the market" is really just a hollow phrase. What you mean is that "demand exists for the product", which for an inelastic good with no readily available substitutes will always be the case.

So, Exxon isn't doing anything wonderful by bringing me oil. I don't have any practical alternatives right now except to buy their (or one of their increasingly few competitor's) product. It is precisely in situations with inelastic goods where monopolistic and oligopolistic pressures can do the most harm, as they are doing now to consumers across the country.

If you're going to throw around the terms monopoly and oligopoly, you should probably consider an industry in which the characteristics of monopoly and oligopoly actually exist. If such a monopoly exists, why are their margins so low? Why are there four other competitors? The only thing even close to resembling a monopoly in the oil industry is OPEC. Even OPEC is saying they want to increase crude output to make alternative energy sources less viable. However, what has really driven the price of gas and oil up is the increase in demand in China and India. Not XOM.

As for my hours of econ, I graduated with a degree in ACCOUNTING and could have had an additional degree in FINANCE with one additional semester of coursework.

Nightfyre
08-02-2008, 03:24 PM
The easy way to say this is "it's a cost". Therefore they can reward themselves as richly as they desire and show only the after compensation profit margin to the public.

As richly as directed to by the board of directors which is directly elected by the shareholders. CEO compensation is huge because the decisions they make could make or break tens of billions of dollars. I'd invest a lot in making sure I had the right guy, too. Think about it.

HonestChieffan
08-02-2008, 03:28 PM
Exec Comp is in annual report

banyon
08-02-2008, 03:30 PM
If you're going to throw around the terms monopoly and oligopoly, you should probably consider an industry in which the characteristics of monopoly and oligopoly actually exist. If such a monopoly exists, why are their margins so low? Why are there four other competitors? The only thing even close to resembling a monopoly in the oil industry is OPEC. Even OPEC is saying they want to increase crude output to make alternative energy sources less viable. However, what has really driven the price of gas and oil up is the increase in demand in China and India. Not XOM.

Margins aren't some sort of sufficient condition for monopoly. Market share, however, is. I agree that China and India's increases in demand are the most important factor here, I think I've always espoused that view in this forum. But I think that speculation and oligopolistic pressures are playing their part, particularly in our refining market.

You've got to admit, with the mergers that have happened just in the last 10 years, we've combined some pretty huge companies.

As for my hours of econ, I graduated with a degree in ACCOUNTING and could have had an additional degree in FINANCE with one additional semester of coursework.

Okay, it sounds like I had more hours of Econ then. Who cares?

banyon
08-02-2008, 03:30 PM
Exec Comp is in annual report

Great, that doesn't have anything to do with what we are talking about, thanks.

banyon
08-02-2008, 03:37 PM
As richly as directed to by the board of directors which is directly elected by the shareholders. CEO compensation is huge because the decisions they make could make or break tens of billions of dollars. I'd invest a lot in making sure I had the right guy, too. Think about it.

We've rewarded them to a tune of increasing their pay from a point where they made 20-30 times what their average worker made to a point where they make 400 times what their average worker makes.

It's not as if John Q. Public is the one attending board meetings or even shareholder meetings, everyone sits on everyone else's boards and they get to vote themselves what ever pay raises they feel they deserve. Most shares in these companies are represented either by the very wealthy, or by financial reps from pension/annuity funds who are part of the same "scratch my back I'll scratch yours" network.

In any event, the dude with the jowels in the pic, he retired to the tune of $400 million dollars as a retirement package. Did he really work that much harder for the next 300 million than he did for the first 100 million? did we really get a tremendous value out of that?

Nightfyre
08-02-2008, 03:40 PM
Margins aren't some sort of sufficient condition for monopoly. Market share, however, is. I agree that China and India's increases in demand are the most important factor here, I think I've always espoused that view in this forum. But I think that speculation and oligopolistic pressures are playing their part, particularly in our refining market.

You've got to admit, with the mergers that have happened just in the last 10 years, we've combined some pretty huge companies.



Okay, it sounds like I had more hours of Econ then. Who cares?

High margins are a characteristic of a monopoly, not a condition, as I stated above. As for speculators, they are doing what they do logically. Only $1.6 billion of xom's profit was from refining :shrug: Refineries are all really struggling right now, in fact. Really, with the increasing demand and continued dependence on oil, the sky is the limit for prices.

Nightfyre
08-02-2008, 03:43 PM
We've rewarded them to a tune of increasing their pay from a point where they made 20-30 times what their average worker made to a point where they make 400 times what their average worker makes.

It's not as if John Q. Public is the one attending board meetings or even shareholder meetings, everyone sits on everyone else's boards and they get to vote themselves what ever pay raises they feel they deserve. Most shares in these companies are represented either by the very wealthy, or by financial reps from pension/annuity funds who are part of the same "scratch my back I'll scratch yours" network.

In any event, the dude with the jowels in the pic, he retired to the tune of $400 million dollars as a retirement package. Did he really work that much harder for the next 300 million than he did for the first 100 million? did we really get a tremendous value out of that?

I'd say he was worth it to Exxon. I mean, the guy influences tens if not hundreds of billions of dollars. People pay finance professionals 2% to manage their money. Exxon is just doing that as well. Ex: exxon has 220 billion in assets. 400 mill is what, .2% of that?

HonestChieffan
08-02-2008, 03:45 PM
the old worker as victim ploy.

'Hamas' Jenkins
08-02-2008, 03:57 PM
When I read threads like this, all I'm reminded of are average kids in high school, who would do anything or say anything to anyone to ingratiate themselves with the popular cliques in school.

Calcountry
08-02-2008, 04:18 PM
In order for a monopoly to exist , it must be satisfying the market. Welcome to basic microeconomics!Don't blame Banyon, he has a minor in Marxian economic thought.

banyon
08-02-2008, 04:22 PM
the old worker as victim ploy.

Were you not able to get the ball into the cup?

banyon
08-02-2008, 04:24 PM
High margins are a characteristic of a monopoly, not a condition, as I stated above. As for speculators, they are doing what they do logically. Only $1.6 billion of xom's profit was from refining :shrug: Refineries are all really struggling right now, in fact. Really, with the increasing demand and continued dependence on oil, the sky is the limit for prices.

You did say that high profit margins were a sufficient condition, or at least you pretty clearly implied that:

If such a monopoly exists, why are their margins so low? (i.e., you can't have a monopoly with "low" profit margins (and they arent' all that low)).

Okay, if only 1.6 bil was from refining, where did the rest come from?

banyon
08-02-2008, 04:25 PM
I'd say he was worth it to Exxon. I mean, the guy influences tens if not hundreds of billions of dollars. People pay finance professionals 2% to manage their money. Exxon is just doing that as well. Ex: exxon has 220 billion in assets. 400 mill is what, .2% of that?

So you really do think he worked a lot harder for that next $300 mil, then?

Nightfyre
08-02-2008, 05:09 PM
So you really do think he worked a lot harder for that next $300 mil, then?

I doubt he worked harder for $300 million. But obviously his decision making faculties were valuable enough to exxon to pay him it to ensure his employment.

Nightfyre
08-02-2008, 05:11 PM
You did say that high profit margins were a sufficient condition, or at least you pretty clearly implied that:

I said it was a characteristic of monopolies. Don't put words in my mouth.

(i.e., you can't have a monopoly with "low" profit margins (and they arent' all that low)).

Okay, if only 1.6 bil was from refining, where did the rest come from?

oil production.

Mr. Flopnuts
08-02-2008, 05:11 PM
Repost. But it was in the lounge.

http://www.chiefsplanet.com/BB/showthread.php?t=188236

Nightfyre
08-02-2008, 05:12 PM
Repost. But it was in the lounge.

http://www.chiefsplanet.com/BB/showthread.php?t=188236

02/01/2008 != 07/31/2008

Mr. Flopnuts
08-02-2008, 05:20 PM
02/01/2008 != 07/31/2008

Wow. I linked the wrong article. It was on MSN's front page that day.

banyon
08-02-2008, 06:12 PM
I said it was a characteristic of monopolies. Don't put words in my mouth.

My interpretation was perfectly reasonable. You have clarified it since, which is helpful.

oil production.

If they are producing and refining their own oil, what difference does it make which ledger they throw the profit in?

Nightfyre
08-02-2008, 06:14 PM
My interpretation was perfectly reasonable. You have clarified it since, which is helpful.



If they are producing and refining their own oil, what difference does it make which ledger they throw the profit in?

Well, from an internal perspective, it's a big deal. :shrug: But refineries in general are struggling badly. Which is more on target with the principle of the matter.

whoman69
08-03-2008, 12:37 AM
I'm so sorry that Exxon is making so little money. Perhaps if their production wasn't down they could have made more. Who are we kidding. If their production was up then the price of oil would go down and so would their profits. During the mergers of the 90s this country lost any competitiveness there was in the oil industry. These companies are not putting their cash back into their product, they are putting it into their capital.

The Republicans cry drill, drill, drill. These companies are not drilling, except into our wallets.