Want to know where your gas money is going? Here's a clue to start your research: The World's largest oil company earned $1,500 last quarter.
Every second.
$1,500 per second. $90,000 per minute. $5,400,000 per hour. $129,600,000 per day. A grand total of $11.68 billion in income during the second quarter of 2008.
The New York Times explains. "Record earnings for Exxon, the world’s largest publicly traded oil company, have become routine as the surge of oil prices in recent years has filled its coffers." But yesterday's results were the highest quarterly profit ever reported by a single company.
Amazingly, disappointed investors sold Exxon Mobil stock yesterday, driving the price down 4.6 percent. The profits, as jaw-dropping as they seem, were "less than Wall Street had expected," according to the Times. The sell-off came partially in response to "problems that surfaced in the company’s report, particularly a 10 percent drop in oil production and a 3 percent decline in natural gas production from the second quarter of 2007." Investor disappointment is "bound to put added pressure on Exxon Mobil’s chairman and chief executive, Rex Tillerson, to search for new fields in politically precarious areas of Africa and the Middle East."
The second-largest U.S. oil company didn't have a bad quarter, either. Bloomberg reports, "Chevron Corp…said second-quarter profit rose 11 percent as record crude prices made up for drops in output from the company's wells and refineries." Other oil companies reported similar results from last quarter. "London-based BP Plc reported a 28 percent profit increase earlier this week, and ConocoPhillips, the third-biggest U.S. oil company, posted record net income of $5.44 billion last week."
Investors may have felt the company didn't make enough, but plenty of other people are angry at the sight of record profits as Americans struggle with the high cost of gas. The Detroit Free Press says Exxon Mobil "took a beating…from politicians railing against Big Oil, drivers bleeding cash at the pump and investors who expected more."
The Boston Herald reports that politicians lined up to criticize the oil companies after the profits were announced. "It’s the most selfish group of companies that I’ve ever seen and the most hypocritical," said Sen. Charles Schumer (D-N.Y.). "Exxon’s profits are excessive. Shell’s profits leave us shellshocked. And BP now stands for Bloated Profits,” added Rep. Ed Markey (D-Mass.), chairman of the House committee that regulates the oil industry.
Defending its members, the American Petroleum Institute told the AP "Big Oil earnings are not out of line compared with earnings in other industrial sectors. For example, the institute notes, Exxon's earnings amount to about 8.5 cents per dollar of sales, versus 11.6 cents for the companies making up the Dow Jones industrials."
That does little to calm angry drivers, however. The AP says the companies face "a broadening backlash from a public that is getting squeezed on fuel prices from every front."
But Congress is unlikely to do anything soon. UPI notes, "Democratic leaders in the U.S. Senate said any action on an energy bill must wait until after the August recess since the two parties have been unable to agree. Republicans want legislation to expand oil drilling offshore and in the Arctic National Wildlife Refuge, while Democrats are pushing for tax credits for alternative energy development and curbing oil speculation." The two parties are at an impasse, unlikely to vote on any new oil industry legislation this summer.
Want to give oil companies less of your money? Research ways to use less gas, and fuel-sipping small cars and hybrids, with U.S. News' car rankings and reviews. If you own Exxon stock and want to send it higher, find the best large SUVs and full size trucks to counteract everyone who is switching to a smaller car.
