A colleague of mine recently e-mailed me about Exxon’s profits:
There are over 6 billion shares of Exxon stock, so its earnings were only $1.37 per share…on a $61 stock! The Exxon earnings are actually a disappointment. The only reason the number is so huge is that the company is huge after all the mergers (many many many stockholders). Why not run a headline saying that Exxon’s annual return is ALMOST 9%? How about a headline saying Exxon’s dividend yield is JUST OVER 2%? Think about it – is $8 billion divided among 6 billion shares & shareholders really outrageous? Would you pay $61 for an investment that earned $1.37 last quarter?
{ 5 comments }
Great point that’s lost in all of the hyperbole.
The tax foundation reported in October ’05 that the Federal Government makes more money off of gasoline than oil companies do. http://www.taxfoundation.org/publications/show/1139.html
How about that for inconsistency?
The truth just does not seem to sell newspapers or allow politicians who feel our pain to get on TV.
The funny part is that the government led by some Republicans is trying to tax the 1.37. Reducing earnings always leads to price reductions???
Oh yeah, point 1, truth does not sell newspapers or get politicians on TV.
Exxon’s earnings per share went up ~45% over 2004 and 2003. With crude $ per barrel going through the roof, it’s reasonable that profits would go up, even if a hard “mark-up” % were used, it is simple math, and it would all fall to the bottom line as no new investments would be necessary, just a greater spread. If Exxon is jacking their selling price beyond a linear % increase, then accusations of gouging then could be made. It certainly cant be assertained from the annual report. Of course gouging is a subjective concept in the first place.
When I read the Constitution and find the part about $1.50 gas as a right, then maybe the Feds could interfere. Otherwise, it’s between Exxon, the investors, and the customer.
Why not float out this idea at the hearings…Nationalizing the oil companys. It will never happen, but the mere thought scares them to death.
Comments on this entry are closed.