No 'windfall profits' for Exxon Mobil

Maybe a mediocre quarter is good news for the oil giant.

By Jonathan Berr Jan 31, 2012 12:41PM
Image: Oil drums (© Kevin Phillips/Digital Vision/age fotostock)Exxon Mobil (XOM) shares were down Tuesday because the oil giant posted worse-than-expected quarterly results. For investors, though, this is not necessarily bad news, as it may quell calls to make the oil industry pay higher taxes.

President Barack Obama and other Democrats argue that the government should strip away decades-old subsidies for the oil industry in favor of promoting greener alternatives such as solar energy. Exxon CEO Rex Tillerson argues that the industry needs these tax breaks and claims the industry earns "windfall profits" are wrong. Moreover, Tillerson says Wall Street traders are running up oil prices beyond the normal variations of supply and demand. Now he has proof to back up his case.

Though people needn't hold a benefit for the Texas oil company, Exxon Mobil's quarter proved that it is not invulnerable. Quarterly profit at the refining and marketing unit fell 63% to $425 million. Profit dropped at Exxon Mobil's downstream unit and at its chemicals business because of the soft economy.

Net income was $9.4 billion, or $1.97 a share, versus $9.25 billion, or $1.85, a year earlier, Exxon said.  It was the smallest profit of 2011. Revenue rose 16% to $121.61 billion. Analysts expected $119.7 billion in revenue. Earnings were a penny under the $1.98 average estimate of analysts surveyed by Bloomberg.

Not much in the way of windfall there.

Jonathan Berr does not own Exxon shares.

Tags: oilXOM
Jan 31, 2012 4:05PM
It's simple. Exxon: run by smart people, run like a business= makes money, Governement: run by idiots, just print money= In debt,>>> CASE CLOSED
Jan 31, 2012 4:01PM
I must be stupid, being a part of the 99%, but I could swear that I've been reading that oil supply is up and demand is down, yet the price of oil and gas continues to climb.  Hey, but what do we know, big business knows best and all of those blood suckers who are manipulating the price of oil and gasoline for their personal profit are just looking out for the middle class.  To prove their point Exxon didn't record record profits for the quarter, only 500 million, but last quarter was over a billion dollars.....not bad averaging 750 million in profit per quarter.....while my 401K still hasn't recovered from the beating it took since 2008.
As long as a commodity is being produced/output and as long as it is in high demand then those who hold stock(s) ''in oil specifically in this case'' then those people will continue to make money. Supply dries up or demand falls through the floor because something better and more efficient in producing power comes along you lose money.
Jan 31, 2012 3:34PM
Those that hate the oil companies for making such huge profits are just uninformed. They can't be blamed though. The media makes it sound like they are making huge profits but let's look closer at the numbers. They sold 121.61 billion dollars worth of oil. They made a profit of just 9.4 billion dollars. That equates to less than 10% profit for dollars spent. This is better than a savings account, but it isn't anything like the profits banks made during the housing bubble. The problem is in scale. Think of it this way. If you owned one share, it cost you roughly 83 bucks. For that 83 dollars, you earned almost 2 bucks over the period of one year. Because these are publicly held companies, there is a better than average chance, that most middle class people own at least some stock in the company, or have money in a mutual fund that holds stock in XOM. While I don't disagree that we should reduce the tax breaks for large corporations, we should all understand that the average person trying to save for retirement that will be affected.
Jan 31, 2012 4:09PM
Governments are not set up with the intention of making money.---CASE CLOSED
Jan 31, 2012 3:36PM
$9.4 Billion. Damn, that means the CEO only gets $1.4 Billion. Wonder if he got a retention bonus?
Jan 31, 2012 4:33PM
I love how people cannot get it through their thick, unthinking brains that this huge $9+ billion profit is only 7.7% profit, but still claim that it's too large, or unjustified, but these same fools ignore may tech companies who's profit percentages are 30 or 40%.  Companies are free to make as much as they can get, short of being a monopoly.  If you don't like this (and I assume that these same people think they should be paid more than their job allows), then go to a another country who prevents people and companies from making too much.
Jan 31, 2012 3:39PM
Multinational corporations should not be allowed to own all the worlds natural resources. We are hostages.
Jan 31, 2012 3:52PM
usual suspects, they don't own anything but the opportunity to drill for it.  You could drill on your property to if you had enough land.  Lame argument.  They, the worlds oil companies, provide this worlds energy like it or not.   The USA has some of the cheapest gas prices in the world, and that is a fact. 
Jan 31, 2012 5:05PM

The way I see it.."The Sopranos have taken over our goverment".......

Jan 31, 2012 4:55PM

nothing wrong with making an HONEST success...but doing it while gouging the populace is sickening.


and don't get me started on Healthcare!

Jan 31, 2012 4:52PM

I don't trade oil stocks.  I'm just fed up with people repeating the myths told my politicians and media to punish successful companies and not looking at the facts themselves.


Someone must be living off the government dole and prefers hardworking, successful people to provide their unearned desires.

Jan 31, 2012 5:47PM

LOVINTHEDOLE....plea​se explain why you "think" Exxon making 7.7% profit amounts to gouging? Do you think companies should only breakeven?



I see it EVERY GODDAM DAY at the gas pump genius...coupled with the fact that supplies are UP...KAPEESH?!?

Jan 31, 2012 5:08PM

LOVINTHEDOLE....please explain why you "think" Exxon making 7.7% profit amounts to gouging?  Do you think companies should only breakeven?

Jan 31, 2012 4:02PM
jcbozark---Who do you think owns it and sells it to me?
Jan 31, 2012 7:39PM
THEY'RE ONLY MAKING 7.7% PROFIT, KAPEESH?!?!  No, I guess not.
Jan 31, 2012 4:49PM

You tell 'em dare these 'cretin' Americans get in the way of your oil day trades...


sheesh...what an azzhole!

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