That was the total of sales last quarter by Exxon Mobil. That's more than Kuwait's annual GDP. No company has ever matched the oil company's $9.92-billion profit. And some lawmakers are steaming.
By Associated Press
Published October 28, 2005
DALLAS - Exxon Mobil Corp. rewrote the corporate record books Thursday as the oil company's third-quarter earnings soared to almost $10-billion and it became the first public company with quarterly sales topping $100-billion. Anglo-Dutch competitor Royal Dutch Shell PLC wasn't far behind, posting a profit of $9-billion for the quarter.
To put it in perspective, Exxon's $9.92-billion profit:
Would cover all Social Security benefit payments for three months.
Would pay for an Ivy League education for about 60,000 kids.
Would pay the average list price for more than 160 Boeing 737s.
Would fund the military operations in Iraq and Afghanistan for more than two months.
The profits led Democrats in Congress to demand a new windfall profits tax.
"Big oil behemoths are making out like bandits, while the average American family is getting killed by high gas prices, and soon-to-be record heating oil prices," Sen. Chuck Schumer, D-N.Y., said.
But Energy Secretary Samuel Bodman said President Bush opposes such a move and is instead considering a wide range of proposals to help cushion consumers, including the creation of an emergency reserve of gasoline and other refined products.
Thursday's outsized earnings are a result of surging oil and natural gas prices that pushed pump prices to record territory after Hurricane Katrina. They come on the heels of similar eye-popping gains reported this week by BP PLC, ConocoPhillips Inc. and Marathon Oil Corp. Chevron Corp. reports its earnings today.
Some Republican members of Congress called on the industry to invest in ways that will increase production so that consumers get a break at the pumps or when they pay their heating bills. But analysts said telling the industry how to spend its money was unfair, if not futile.
"Exxon is a good corporate citizen, but it does not work for the welfare of the country," said oil analyst Fadel Gheit at Oppenheimer & Co. in New York.
Exxon chairman and chief executive Lee Raymond did not mention the record results in the company's earnings release. Instead, he noted that the world's largest publicly traded oil company "acted responsibly in pricing at our company-operated service stations, and we also encouraged our independent retailers and distributors to do the same."
Henry Hubble, Exxon's vice president of investor relations, noted on a conference call that the company's record profit rose 75 percent from a year ago. He said the gains "reflect the strong commodity prices and our fundamental business model that is disciplined, straightforward and focused on generating value while managing risk."
The previous oil-industry earnings record was Exxon's 2004 fourth-quarter profit of $8.42-billion. To put its performance into perspective, Exxon's revenue for the three-month period was greater than the annual gross domestic product of some of the largest oil-producing nations, including the United Arab Emirates ($95.5-billion) and Kuwait ($51.2-billion), even though it lost considerable production because of a string of hurricanes that battered the Gulf Coast.
Robert Kaufmann, a professor at Boston University's Center for Energy and Environmental Studies, says production will return to prehurricane levels and hurricane-related losses will disappear in future earnings reports, but profits will remain high.
"A lot of the capacity was being built when oil was trading at $20- to $30-a-barrel range, so by definition those fields are much more profitable," he said.
Despite the profit surge, Exxon's performance fell short of analysts' expectations and its shares fell 60 cents to $55.60 in trading Thursday on the New York Stock Exchange, while U.S.-traded Class A shares of Shell rose $1.15, or 1.9 percent, to $60.65 on the NYSE.
With oil futures above $60 a barrel for much of the third quarter, Exxon's profits from petroleum exploration and production increased by $1.8-billion to $5.7-billion.
Information from the Washington Post was used in this report.