Curious About Exxon's $11 Billion Profit
CBS
Consumers may be stuck paying nearly $4 for gas, but what has been bad for us has been good for Exxon-Mobil. So good, in fact, the oil company is posting its highest profit in history.
Those profits are stirring up people's curiosity in the Boston area. Shayna from Waltham visited declareyourcuriosity.com to look for answers.
She asked, "Why are Exxon's profits setting records while the consumer is struggling to pay for Exxon's product, basic bills, and to keep a roof over their heads? Given this fact, I'm starting to think that it's not the rising price of oil that is causing our rising prices, but the rising greed of the corporations!"
So how much money is Exxon-Mobil reporting? Their profits average about $1,500 a second. It's the kind of number any business would love to hear, and the one customers hate to pay.
WBZ's Jonathan Elias visited a local gas station to ask customers, "do you feel lucky when you get gas under four dollars a gallon?"
"Yeah, it's very lucky," one customer answered.
"I feel like I can actually feel comfortable about driving to work," said another.
Stop! What are we thinking? Lucky? Last year we were paying less than $3 a gallon.
So you would think we are all in this together. The consumers are being pinched because the oil companies are being pinched, right? Not exactly.
Exxon just released their quarterly earnings and they made lots of profit, the likes of which our country has never seen before. Exxon-Mobil turned a profit for the second quarter of $11.7 billion. That is the biggest three-month profit in U.S. corporate history.
"We've never seen a company earn so much money," said Art Hogan, Chief Market Analyst at Jeffries and Company. "There's about 53 nations that don't have GDP's [Gross Domestic Products] as large as the one quarter earnings that Exxon just had. Countries you've heard of too, like the Philippines and Hungary."
However, even with their record profits, Exxon's stock fell on Thursday.
"Here's the crazy thing," Hogan said. "So now we have a company that's earned more than any other company has ever earned in a single quarter and we're disappointed because we thought they were going to earn even more."
Go to any local gas station and ask the folks paying those profits if the price is business or greed, guess what you find?
"$11 billion in three months; that's like, totally ridiculous," one gentleman responded.
"I wish they'd give back some of that money to us, so I could enjoy gas at a lower price and not stress out," another driver said.
Analysts say a company that has a 5 to 7 percent profit margin is a good investment. Exxon-Mobil had a 40 percent profit margin, which experts describe as phenomenal.
Funny, we didn't hear a single person at the pumps use that word to describe the prices.
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