Exxon-Mobile’s recent profits were very moderate

You don’t have to take my word for it, just ask Exxon-Mobile. In a new ad (pdf) that ran on the editorial page of the L.A. Times this morning, Oil and Apples (html version) we are informed that:

Our earnings are indeed at a record high, driven largely by the price of the commodities we sell. But if you compare profits per dollar of revenue across a wide range of U.S. companies,” a true “apples to apples” evaluation, you see that oil earnings are not out of step with other major industries.
As the chart shows, oil and gas industry earnings averaged 7.7 cents per dollar of revenue during the second quarter compared with the overall U.S. industry average of 7.9 cents. ExxonMobil earned 8.6 cents for every dollar of revenue.

Exxon-Mobile wouldn’t lie. Would they?


Banking and Pharmaceuticals top the chart at 19.6% and 18.6% quarterly profits, which begs the question of whether it is remotely possible that American voters are getting massively ripped off by those industrial sectors. The Insurance sector, which has been referred to as America’s Invisible Bankers comes in at 9.6% quarterly profits.
I got the funny feeling that Exxon-Mobile’s ad was foreshadowing Scooter Libby’s defense, where his lawyers point to Al Capone as proof that what Scooter did wasn’t really all that bad. (See Confessions of an Economic Hit Man, The $800 Million Pill and The Big Fix: How the Pharmaceutical Industry Rips Off American Consumers.)
I was also impressed by this claim:

Last year alone, our new capital investments approached $15 billion, primarily in new exploration and production, but also in refining capacity and new energy-saving and environmental technologies.

I couldn’t help but wonder why new refining capacity and investment in energy-saving and environmental technologies was lumped in together with new exploration and production. I’m sure there is a very logical explanation.
Following the Insurance sector is Telecommunication Services at 9.4% (does that include the cable company that rips me off every month?) and then the Food, Beverage and Tobacco at 8.9%. I have to admit I was a little curious why Business Week and Oil Daily, the industry magazine that is the source for Exxon-Mobile’s chart, decided to group the Food, Beverage and Tobacco sectors all into one category at 8.9% profits. Is Food, Beverage and Tobacco a normal industry sector? I guess that must be a perfectly natural busness sector for a chart like the one in Exxon-Mobile’s ad.
The only serious question I had about Exxon-Mobile’s ad is how much time the editors at the L.A. Times spent deciding whether to run it on the editorial page or the funny page. I will also bet a dime to a dollar that Exxon-Mobile’s ad will be running as straight news on the Faux News network and Reich Wing talk radio circuit next week.

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6 thoughts on “Exxon-Mobile’s recent profits were very moderate

  1. Isn’t this what a totally unregulated economy does? We’re totally dependent on oil and gas; can’t go to work, get groceries, heat our homes without it, can we? Even if we can walk to the store and carry the stuff home, that stuff has been been brought in by truck. So why shouldn’t we expect to pay blood money for oil and gas?
    Even Homeland Security seems to be based on a requirement that everyone have a car. If you can’t escape in your car, don’t expect any help from them. It’s your own fault if you’re stuck in the danger zone, isn’t it? And they react accordingly. Consider those thousands of tourists stuck in Mexico since the hurricane there with no help from their own government. Never mind that the planes didn’t bother to show up to fly them out. And never mind that the requirement that people escape approaching disasters by car mostly creates inescapable traffic nightmares, either.
    So from now on you can take it for granted that any situation that creates a captive audience gives the industry involved a moral right to exploit the situation. Congress upheld this when it set up the Medicare prescription drug plan, didn’t it? It seems to be our moral duty now to let ourselves be exploited.

  2. Paraphrase:
    “See, the trough is much deeper and much wider now, so we can gulp huge profits but because everyone else is, too, you must ignore that ours were up 78%”

  3. Something to consider-
    Since 1977, government collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period:
    So, the businesses which takes the risk collects ~8.9%, while government (which takes absolutely no risk in anything for revenue) gets ~20%! And, they are the most inefficient and corrupt organizations on Earth! (Outside the UN)

  4. Pericles, do your friends intend to begin compensating the Alaskans for the demolition of their livelihoods now?
    You talk about risk, but it is not the oil companies risking a damn thing, it is us, our water, our air, our property.
    They do not, have not, and I expect they will not sell their product below cost (that always includes obsene salaries for their CEO’s) plus profit.

  5. [[Is Food, Beverage and Tobacco a normal industry sector?]]
    I can’t answer that question, but some of America’s tobacco companies are, or recently have been, part of FBT conglomerates … Altria, RJR/Nabisco, Liggett (“The companies of your pleasure”), etc.

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