On the street
I think that’s just obscene. I guess I want to know how they can post record earnings and not be held accountable, while the rest of us are being gouged at the gas pump.
Houston Exxon Mobil Corp. posted the largest annual profit by a U.S. company - $40.6 billion - on Friday as the world's biggest publicly traded oil company benefited from historic crude prices at the end of the year.
Exxon also set a U.S. record for the biggest quarterly profit, posting net income of $11.7 billion for the final three months of 2007, beating its own mark of $10.71 billion in the fourth quarter of 2005.
The previous record for annual profit was $39.5 billion, which Exxon Mobil had in 2006.
The eye-popping results weren't a surprise given record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel, more than 50 percent higher than a year ago.
Crude prices reached an all-time trading high of $100.09 on Jan. 3 but have fallen about 10 percent since then.
The record profit for the October-December period amounted to $2.13 a share versus $1.76 a share in 2006. Year-ago net income was $10.25 billion.
Also extraordinary was Exxon Mobil's revenue, which rose 30 percent in the fourth quarter to $116.6 billion from $90 billion a year ago. For the year, sales rose to $404.5 billion - the most ever for the Irving, Texas-based company - from $377.64 billion in 2006.
In addition to benefiting from higher commodity prices, the company said its results were evidence of a well-run, globally diverse operation that's investing billions to find more energy supplies. It noted that its capital and exploration spending amounted to nearly $21 billion last year, up 5 percent from 2006.
Exxon Mobil produces about 3 percent of the world's oil.
Its shares fell 45 cents to $85.95 Friday after rising as high as $87.86 earlier in the session. The shares have traded in a 52-week range of $69.02 to $95.27.
Higher commodity prices in the quarter were clearly evident from earnings at Exxon Mobil's exploration and production arm, known as the upstream. Income rose 32 percent to $8.2 billion from $6.2 billion a year ago.
On an oil-equivalent basis, production increased nearly 1 percent from the fourth quarter of 2006, driven by higher demand for natural gas in Europe. Excluding the expropriation of its Venezuelan assets last year, divestments and other factors, production rose nearly 3 percent.
Refining and marketing, or downstream, earnings were $2.3 billion, up from nearly 2 billion in the year-ago quarter, as improved refining operations offset lower U.S. refining margins.
In the U.S., downstream earnings were off sharply from a year ago - $622 million in the most-recent quarter versus $945 million in 2006.
Refining margins - the difference between the cost of crude and what the company makes on refined products such as gasoline - have been squeezed in recent months as spiking oil prices outpaced increases in gasoline prices and other refined products.
Already, ConocoPhillips has said record oil prices at the end of 2007 helped it post a 37 percent increase in fourth-quarter profit, even as it produced less crude and natural gas than a year earlier. Its quarterly net income rose to $4.37 billion versus $3.2 billion a year earlier.
ConocoPhillips is the nation's third-largest integrated oil company behind Exxon Mobil and Chevron Corp.
Chevron reported separately Friday that its profit rose 29 percent in the fourth quarter, as surging prices for crude oil offset weak results from its refining business. It earned $4.88 billion, or $2.32 per share, from $3.77 billion, or $1.74 per share, a year earlier. Revenue rose 29 percent to $61.41 billion from $47.75 billion.
On Thursday, Royal Dutch Shell PLC, Europe's largest oil company, posted a 60 percent gain in fourth-quarter profit to $8.47 billion on asset sales and higher oil prices. Shell said full-year net profit was a company record $31.3 billion, up 23 percent from the prior year.