ExxonMobil Profits... seem high don't they? This quarter (2Q/2008FY) profits were 11.68 Billion Dollars[1]. Let's make that all digits:
11,680,000,000.00$ - Dang, whish my bank account had half that many zeros before the decimal.

That's how much profit they made on 138 Billion Dollars in Revenue.
In: 138,000,000,000 Out: 126,320,000,000

turns out Exxon has to purchase more Crude to refine than it sells to other refineries.

And after all that? They still fell short of Wall Street projections. The Investors apparently felt that Exxon would make closer to 12.1 Billion Dollars. They only fell short by about 500 Million. So naturally their stocks fell.

I find that to be an issue. You post the highest recorded profit of any company in US history and your stocks fall because it wasn't High Enough.

Of course - here's one of my favorite parts - in 1989 the Exxon Valdez crashed and spilled 10.8 Million Gallons into Prince William Sound. The initial case took five years. The first appeal took eight years. Several more appeals later, final settlment occured June, 2008. Just over 19 years for Exxon to be finally fined punitive damages of a little over 500 Million.[2]
Back to the topic: Q2/2008FY Profits were reduced from 11.97B to 11.68B due to "Money set aside for punitive damage awards" - 237 Million in Actual, 507.5 Million un Punitive. If you assume the Actual Damages were paid off in the previous 2 decades, that means Exxon will (at 300 Million per Quarter) pay off the punitive damages in Q3/2008FY. Clean sailing for Q4, nice trick if that's how it plays out.

But, Exxon Profits in 1989 were 5 Billion, less than 50% of current Profits. 5 Billion is also the initial Punitive Damage Awards set in 1994. Today, Exxon would take a couple years at 300 Million a quarter to pay that off (4 Years, 1 Quarter) at current Profits. Also, consider this is post Exxon and Mobil merger (1999), who knows what Exxon profits alone might be today. . . though a funny side note is that the original company was split in 1911 (because it was too large) by the government and two of the 34 companies would remerge to become the largest US oil company 88 years later. Irony is in there somewhere.

One could go rounds regarding the morality of the appeals and initial punitive damage awards and the Big Business vs Government vs Citizen dynamic. Sure, it was absolutely negligent in the HOW it happened, but Exxon sure as hell didn't WANT it to happen. Looking beyond even the PR of it all, 10.8 Million Gallons is a lot of lost profit. On top of actual cleanup costs (which they sucked up, though some was recovered through insurance) and lost profits the punitive damages come off as excessive and as anti-business as the final decision is lauded as pro-business. A little discresion on the part of the original jury and court might have sped up the repayment process and made Exxon a little more cooperative.

So, record profits from an oil company. It shows one of two things - the Oil company is gouging us for all we have, or we're so reliant on oil they can't help but make billions of dollars. Free Market Economics at it's best in either case.

So, how much does ExxonMobil make on each dollar? In other words, what's the profit margin?
According to sources I can find - at or less than 10% for the industry at large.[3]
ExxonMobil specifically is currently rated at 9.9% profit margin[4]. They keep less than 1 dime for every dollar they make.
Comparing it to other popular companies: [5 - search by company]
Apple Computer: 14.9% Profit Margin (iPods!)
Microsoft Corp: 29.3% Profit Margin (most popular OS evar!)
General Motors: -23.3% Profit Margin (largest US car maker.. fails)
Honda Motors: 6.2% Profit Margin (a profitable car company!)
Pfizer Inc: 18.5% Profit Margin (Medication is expensive, AND they make bank)
ConAgra Foods: 8.0% Profit Margin (food costs have gone up too. . .)
Britsh Petrol (BP): 8.8% Profit Margin (another Oil Giant)

Well, those are some major players in the field of modern corporate culture. Industry wide Oil isn't near the top of the heap, in fact according to the graph[3] it's the bottom at the Industry Level. ExxonMobil seems to be at the top of the US heap at least.

Really, are they taking us for all we're worth - or are we just pumping every quarter we have into the machine to keep playing for another five minutes and complaining that it has all our money.

[1]http://money.cnn.com/2008/07/31/news/companies/exxon_profits/index.htm?cnn=yes
[2]http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill
[3]http://everydayecon.wordpress.com/2006/04/26/oil-profit-margins-vs-other-industries/
[4]http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=XOM
[5]http://finapps.forbes.com/

Food For Thought - US Oil Import Sources:
http://tonto.eia.doe.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm
Largest Single source of US Oil: Canada - 18.24% of all imported oil
Persian Gulf Total Imports: 19.05% of all imported oil.
Both are May 2008 statistics; So ... when we talk about "freedom from Oil Imports" do we mean all the countries we like and important oil from (Canada, Mexico, Brazil, US Virgin Islands to name a few big ones we import from) or just the Middle East? Seems we could probably cut the Mid-East out of our Oil Import Needs simply by cutting back with alternate fuels and just plain old using less, and still keep up imports from all our good friends out there.

Parting Shot:
http://www.gravmag.com/oil2.html

Ask yourself... just how much smoke is being pumped into our eyes?

Under Research: Phosphorus & Farming