Exxon shatters profit records
Oil giant makes corporate history by booking $11.7 billion in quarterly profit; earns $1,300 a second in 2007.
By David Ellis, CNNMoney.com staff writer
February 1 2008: 10:03 AM EST
NEW YORK (CNNMoney.com) -- Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world's largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. That's up from $10.25 billion, or $1.76 per share, in the year-ago period.
That topped Exxon's previous quarterly profit record of $10.7 billion, set in the fourth quarter of 2005, which also was a record for a U.S. corporation.
"Exxon can put out some amazing numbers and this is one of those cases," said Jason Gammel, senior analyst at Macquarie Securities in New York.
Exxon also set an annual profit record by earning $40.61 billion last year - or nearly $1,300 per second in 2007. That exceeded its previous record of $39.5 billion in 2006. In the fourth quarter, revenue rose 29.5% from a year ago to $116.64 billion.
Analysts were looking for the company to report quarterly profit of $10.36 billion on revenue of $114.9 billion, according to earnings tracker Thomson Financial.
Exxon attributed its impressive results to strong performance across its divisions, but a large part of the profit surge was underpinned by climbing oil prices.
Crude prices skyrocketed nearly 60% last year. The surge helped prices break through the $100 a barrel mark for the first time ever early last month. Since crossing that milestone, prices have eased to around $91 a barrel.
Natural gas prices also jumped last year, albeit marginally. But costs have also increased for the oil companies, which is why profits haven't risen as rapidly as crude prices.
Big oil companies that both pump oil and refine crude into gasoline have to spend more for crude but are unable to pass on all the extra cost to consumers, which eats in to gasoline profit margins.
The average price for a gallon of regular gasoline hit an all-time high of $3.227 in May, according to the motorist organization AAA. The high prices were blamed on strong demand and a series of accidents that shut down refineries in the U.S. Slack demand for gasoline in the latter half of last year kept gas prices from rising as much as crude prices.
Exxon's earnings are likely to draw fire from consumer rights groups, who contend the oil industry is deliberately restricting supply and profiting on the back of U.S. motorists. They have previously called for a windfall profit tax on oil firms and have proposed breaking up the big oil companies created during the 1990s merger wave.
Exxon isn't the only oil giant to report impressive earnings. No. 2 Chevron (CVX, Fortune 500) also reported a jump in quarterly profit on Friday. Conoco (COP, Fortune 500), the nation's third largest oil company, trounced profit estimates by nearly 25% when it reported last week.
I'm sorry, what's this crap about not being able to pass along ALL of the costs to the consumer? Pardon me?! Give me a freaking break. That's the biggest load of malarky I've ever heard. It's more like Mr. Big Oil Man is AFRAID to pass them on b/c you might actually mutany against him & suddenly run out and picket the ridiculously high gas prices that HE HIMSELF is inflating. Crap, I tell you. And where's the government in all of this, you ask? Oh gee, let me see. They're happily sharing in those record profits - through incoming campaign contributions, investments, profit shares, etc. How nice it is to know that our government is on our side - working for the greater good! (Anyone else hear that laughing??)