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.