Thursday, October 30, 2008
Profits, profit margins, get the whole story
With 58% Jump in Profit, a Record Quarter for Exxon
As usual the NYT, like most of the rest of the media fail to put oil company profits in perspective.
The "record" was set with the highs in oil prices back in the summer. I want to know what the profit "margin" was. The numbers are impressive, but most Americans don't differentiate between "profit" and "profit margin" or the net earnings to revenue ratio.
That is the real telling figure. Microsoft averages 28-29%. Coke averages 18%. Most people think a 10% margin is acceptable. Historically, oil companies earn 7.5-8.5%, even during the recent "astronomical highs." Exxon's net margin is 9.21%. Coke 18%, Microsoft 28%, Exxon 9.2%. Who's really raping the consumer?
In this quarter they spent $7 billion on research and development, nearly $33 billion on taxes (that's before the Obama "windfall" profits taxes) and had earnings of $14.8 billion.
And those earnings are returned to the investors, i.e. pension funds, mutual funds, 401-K's, individual investors, institutional investors. If you have a retirements fund or mutual fund, you may very well be a beneficiary.
All I want to see is perspective in these articles but they are determined to demonize these companies without which our economy would come to a screeching halt. No energy to run it, no economy, no jobs, no home, no retirement, no food, clothes, goods etc.
Do they make a lot of money, Sure do! Is that bad? Let 'em go bust and see what happens. Do they earn excessive profits, not even.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: capitalism, energy, Exxon, New York Times, oil, profit margin, profits, taxes, windfall profits
Friday, August 08, 2008
Windfall profits?
Microsoft reports a net profit of 29.3% (5 year average of 27.9%) Industry 5 year average 16.3%
Coke reports a net profit of 18.4% (5 year average of 21.2%) Industry 5 year average 16.2%
Gannet (Newspapers) reports a net profit of -22.8% (5 year average of 15.8%) Industry 5 year average 7.2%
BP reports a net profit of 7.3% (5 year average of 8.2%) Industry 5 year average 10.9%
Exxon reports a net profit of 9.2% (5 year average of 9.6%)
Conoco-Phillips reports a net profit of 7.6% (5 year average of 6.7%)
So who's making more on their investment and which company are you going to invest in? Who is making more off the consumer? The "profits" are distributed to the investors, the stockholders. I.e. Mutual Funds, 401-K's, Pension funds and individual investors. Tax these "excess" profits and who are you taking the money away from? Vanguard, Washington Mutual, College Retirement Equities, Fidelity and 1624 more mutual funds and institutional funds hold 52% of Exxon alone.
Research the other oil stocks and see who is holding them, the majority holders include your next door neighbor, maybe even yourself. So before you demonize, know what it is you're demonizing.
The politicians are merely playing into the ignorance of the American, public school educated, people. It takes work to know the facts. Try it, it's empowering.
"We are all in the same boat on a stormy sea and
we owe each other a terrible loyalty." - G. K. Chesterson
Labels: election, fuel prices, politics, power, taxes, windfall profits