We can't all make $39.4 billion: Chevron earns only $3.77 billion last quarter
The nation's No. 2 oil producer Chevron had a "disappointing" 4th quarter, earning only $3.77 billion dollars in the closing months of 2006. You may be thinking that $3.77 billion can't be all that bad, but No. 1 oil producer ExxonMobil ended the same quarter with $10.25 billion in profits, nearly tripling its closest rival. Chevron's profit drop of 9% was expected by analysts after total revenue fell from $47.75 billion to $53.79 billion during the same period in 2005. In fact, Chevron actually beat analysts expectations by a penny per share, so the quarter wasn't that bad, it just looks that way in comparison to the record profits of ExxonMobil.
[Source: Reuters]
Reader Comments (Page 1 of 1)
whofan 7:25AM (2/06/2007)
Big oil is legalized organized crime.
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matt 8:14AM (2/06/2007)
I didn't realize I was reading the onion.
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mike 8:21AM (2/06/2007)
So called BIG OIL only makes half as much profit as the US Govt. When Charles Schumer (D-NY) was being interviewed and bashing 'BIG OIL' for charging so much for gas, he was asked if he would recind the Federal Gas tax to lower prices for consumers (which amounts to almost the same profit percentage as the company...and that's for EVERY company, not just one). After he stuttered for about 10 seconds he said no, and then changed the subject when confronted with the amount of money made by the govt as compared to oil companies. Don't fall for this crap. If you want them to make less, then make better choices when buying your car. I refuse to bash a company because they are profitable.
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Tina 8:25AM (2/06/2007)
Hm, poster number 1, you must not be a share holder.
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Hamud 8:53AM (2/06/2007)
Mmmm, "total revenue fell from $47.75 billion to $53.79 billion" I guess it didn't fall...
Wish I could be a share holder of a company that has "only" $3,77 billion of earnings per quarter, heheeheh.
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Scott 9:29AM (2/06/2007)
#3: When the govt makes a profit (putting a tax on gas), it's used for operations like running the DMV, repairing and creating roads, etc.
When ExxonMobil makes a profit it goes to Lee Raymond's 30 million retirement bonus.
I won't call it legal organized crime, but not being able to see the difference between big oil and the government is startling.
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matt 10:32AM (2/06/2007)
#6 - when energy companies make a profit, it goes back into developing better technology for finding and producing oil.
gasoline is $2/gal at the local pump. on amazon.com, you can buy a six pack of 1l bottles of evian water for $7.59, which is $4.80/gal.
I think the government isn't doing enough about big mineral water. they're charging us exorbitant prices for something we need to live! evian doesn't even need to find the water. evian doesn't need to drill a 20,000 feet deep hole which may or may not contain a hydrocarbon reserve. evian doesn't need to worry about drunk hunters shooting a hole in the trans-alaskan pipeline and doing mountains of paperwork for the EPA.
but the focus on big oil and not big mineral water?
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DriftPunch 10:57AM (2/06/2007)
"When the govt makes a profit (putting a tax on gas), it's used for operations like running the DMV, repairing and creating roads, etc."
Don't kid yourself, the bulk will go to cash payments to entitlement programs. Unlike state governments (which are run far more effectively), most federal tax revenue goes into the general fund regardless of the revenue source.
#3's point should be taken, as he's talking about hypocracy. Shumer is being a populist. He is not talking about what is done with the money, but the fact that such a large amount is being taken in the first place. In this context, federal gas tax revenue is farily compared with profits. The hypocracy is his stance that only commercial interests are capable of 'hosing' consumers.
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Chris 11:14AM (2/06/2007)
@Matt
Evian might cost 4.80/gallon, but not all water does. In fact, if the government didn't subsidize gas prices, we might very well pay more than 4.80/gallon (like much of the rest of the world).
I'm not some tree-hugging granola-eating hippie. so I don't get all offended by energy companies making record amounts of money. There are two things about the current state of gas that irritate me though:
1.) That by subsidizing gas prices I firmly believe the government is doing more long-term harm than good. If people had to pay 5/gallon for gas, they might seriously reconsider some of the choices they make. More people would investigate public transportation, and more people would buy cars with better gas mileage (which would prompt automakers to put more effort into designing more efficient cars, including maybe hybrids that don't look ridiculous). It's not a silver bullet, but I think it's the only way alternate engergy will ever be a viable option (there has to be economic incentive for people to do it).
2. That the argument gas companies make about their record revenues is that the rising price of gas obviously makes it more expensive, and as the demand doesn't decline, their revenues go up. This is true, but the rising cost of gas would only increase their revenue, not their profit. Their profit would go up linearly if this was the case. It is not, however; as their profits have been going up exponentially. This means they are using the rising cost of gas to their advantage, so their rationale is a little disingenuous.
All of that being said, Exxon and Chevron exist for the sole purpose of making as much money as possible for the shareholders of their companies, they are not human beings with a moral perrogative. Not to sound cold, but I don't expect them to do anything other than screw everyone over as much as they're able to get away with. They're not some evil entity, they're just a corporation that wants to make money. While it's nice to read about corporations with altruistic intentions and a "kind-heart" and all that nonsense, it's not the norm. This is capitalism, pure and simple.
So props to Chevron on making all that money. I'm not losing any sleep over it, just like I won't lose any sleep when the gas economy finally collapses and these companies start hemmoraging money. That's the beauty of the invisible hand...it giveth and it taketh away.
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Justin 11:28AM (2/06/2007)
Oil companies are jacking you for your money. Talk about hypocrisy all you want, but they have a limited resource that everyone needs, and makes you pay handsomely for it. Someday, their wells will dry up and we'll all be laughing unless they were forward thinking enough to take over whatever the next "screw the customer for the next century" market is.
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bernie 11:41AM (2/06/2007)
"So called BIG OIL only makes half as much profit as the US Govt."
I see we have any of a number of Fox News/Bush Administration spinners in the forum. The Karl Rove school of PR says if you blame anything on the government - no matter how foolish -- people will just cross their eyes and go away.
Last November that line of hooey failed to work anymore. Try again, chump.
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W 12:28PM (2/06/2007)
"I won't call it legal organized crime, but not being able to see the difference between big oil and the government is startling."
Hell yeah! What's the matter with you people? Can't you see the difference?
When Big Oil pulls in billions they spend it on themselves, when Big Govt pulls in billions they spend it servicing the interest on the national debt created by deficit spending!
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Mike 12:33PM (2/06/2007)
Buy oil stocks and drive the most fuel efficient car you can buy.
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Frank 12:59PM (2/06/2007)
"I see we have any of a number of Fox News/Bush Administration spinners in the forum."
The above is proof that our public education system needs an overhaul yesterday. He can't even understand economics 101. Or he's just a George Sorros, MSM, Daily Kos spinner ;)
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Frank 1:03PM (2/06/2007)
PS: How 'bout that Nanci Pelosi? Gave us a minimum wage increase except for American Samoa. Oh wait! Starkist had major packing plant there. And her husband owns millions worth of stock in the company. Shame the workers won't be seeing any increase in there wages, but I'm sure hubbies stock dividends will be just fine. I'm glad she's for the "working people".
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matt 1:13PM (2/06/2007)
#9 if profit = revenue - costs and cost remains the same while revenue increases exponentially, why wouldn't profit increase exponentially as well?
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Chris 3:14PM (2/06/2007)
@matt
because costs don't remain the same; costs increase as the price of crude goes up, as well as through development. As gas companies pay more for the crude and have to pay to keep digging for more sites, those costs increase year over year. The problem is that:
revenue - costs should both be increasing at the same rate, ie: the only additional revenue should be from the higher cost of the crude and development (in a perfect world).
but in reality profit is increasing in a completely different direction than revenue (one is exponential, the other is linear).
Again, they're out to make as much money as possible, so I'm not saying they're vultures or anything, but they argue that their increased costs are what is making their revenue so high, but that doesn't explain why their profit margins are increasing at a completely different rate. I think there's a little of that "selling toilet paper and milk right before a hurricane" phenomenon going on.
And like I said, that's their right, but it won't sustain itself, and I don't want to listen to them complain when they're looking for bankruptcy protection after the oil economy collapses.
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gwballin 4:56PM (2/06/2007)
PS: How 'bout that Nanci Pelosi? Gave us a minimum wage increase except for American Samoa. Oh wait! Starkist had major packing plant there. And her husband owns millions worth of stock in the company. Shame the workers won't be seeing any increase in there wages, but I'm sure hubbies stock dividends will be just fine. I'm glad she's for the "working people".
Posted at 1:03PM on Feb 6th 2007 by Frank
Frank,
When was the last time that any minimum wage increase affected America Samoa? I despise Pelosi, but your example is the reason Republicans may loose my vote the next election. Either you know little about the subject, or you know enough but still choose to spin it for political gain - either case is reprehensible.
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gwballin 5:02PM (2/06/2007)
10. Oil companies are jacking you for your money. Talk about hypocrisy all you want, but they have a limited resource that everyone needs, and makes you pay handsomely for it.
Posted at 11:28AM on Feb 6th 2007 by Justin
Wrong, they have a resource that everyone wants. You could always use one of the alternatives, but they are so more expensive.
So tell me again why you are complaining about the oil companies that offer you a product that people want that is so much less expensive than the alternatives?
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