Exxon-Mobil

In reply to tuna55 :

Most companies are around  8-10%. 
 

groceries is like 2%.   
 

I worked for a massive bakery once that did 400% on its main items.  
 

porschenut said:

How much do they average in tax es paid every year?

Here you go:  https://www.macrotrends.net/stocks/charts/XOM/exxon/total-provision-income-taxes 

In 2022, about $17B.  In 2021, about -$1B.  In 2012, about #31B.

In reply to GameboyRMH :

I think you linked the wrong article? It mentioned a downturn for the industry- 

"Is this the beginning of the end for Big Oil’s windfall?"

If they had record profits, then even as things cool off I'd expect them to be "near record profits," as long as the expected decline is a slope rather than a cliff. And with inflation, it's easier for any business to show record profits because the dollar is worth less. 

Passing judgment on short term trends- especially when predicting trends that haven't happened yet- is misleading to say the least. If a baseball player goes 3 for 4 in a game, you don't call him a .750 hitter. 

Fueled by Caffeine said:

In reply to tuna55 :

Most companies are around  8-10%. 
 

groceries is like 2%.   
 

I worked for a massive bakery once that did 400% on its main items.  
 

 

No

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html

GameboyRMH said:

I mean, it's bad for most people and all non-human life and especially Ukrainians, but yay Flo I guess?

She was ninety years old and bed ridden when Putin invaded Ukraine, clearly she had nothing to do with that.

I'm just celebrating her sharpness and toughness.

She went to Berkeley, I went to Cal State...she came from affluence, I didn't...our common ground was investing, on that we were equals and it brought us together.

I admire her, that's all.

Now, back to finding something to be butt hurt about.

In reply to tuna55 :

We're talking different numbers. Gross margin vs net.  I should have been more accurate with my discussion. Gross has only cogs taken from it but net has all other administrative costs applied and is more accurate. 
 

What I said was accurate.  

Fueled by Caffeine said:

In reply to tuna55 :

groceries is like 2%.  

Grocery stores are extremely low profit margin, but their return on investment (ROI) is relatively high, because their investment is pretty low and they cycle through any given dollar on a daily or weekly basis.

Acquiring rights to an oil field and developing it for production costs billions of dollars and can take a decade.  So therefore their profit margin has to be high because the payoff takes so much longer and their money is tied up that whole time.

Exxon Mobil and Kroger don't have radically different Returns On Investment.

In reply to Fueled by Caffeine :

And those other businesses that you referenced also had inflated net margin percentages. Comparing their long term averages with Exxon's 2022 peak is not an even comparison. Using your grocery example, net profit margin went up to 3.5% for 2021 (couldn't find reliable 2022 numbers but I believe they dropped back to around 2%.) That is a similar percentage increase above their average as Exxon's, despite being an industry average. I'm sure individual retailers recorded greater increases. 

In reply to Duke :

This is not wrong.  Walmart makes much revenue due to groceries. But not much profit. 

In reply to Boost_Crazy :

This is fair. 

Hey, everyone, I found the outrage of the week.

Fueled by Caffeine said:

In reply to Duke :

Walmart makes much revenue due to groceries. But not much profit. 

But they make that tiny profit on each grocery item millions of times a day across the country.

It's generally considered that the bigger a company is, and more stable the minimum demand level for their product is, the lower the minimum profit percentage becomes necessary to be worth doing business in the long term.

Small companies with unstable demand may need 30%, or more, to justify staying in business... Meanwhile, many major corporations (and entire industries) have proven successful in the long term at the 5% (or less) range. When it comes to margins, equal does not mean equivalent.

In reply to Duke :

Yes. Numbers big. % small

https://www.reddit.com/r/dataisbeautiful/comments/10il2gw/oc_walmarts_2022_income_statement_visualized_with/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
 

Good visualization. 

Sorry.  I didn't mean for this to go sideways.

Duke said:

Fueled by Caffeine said:

In reply to Duke :

Walmart makes much revenue due to groceries. But not much profit. 

But they make that tiny profit on each grocery item millions of times a day across the country.

That same logic could apply just as easily to the net profit on each gallon of gasoline millions of times a day across the country... If talking net vs net profits. The capital expenditures (and ROI) are already baked into it, regardless of how large or small they might be.

Oil pricing is market driven more than cost of doing business driven... So arguments about business costs are pretty much irrelevant to this discussion.

Driven5 said:

Duke said:

Fueled by Caffeine said:

In reply to Duke :

Walmart makes much revenue due to groceries. But not much profit. 

But they make that tiny profit on each grocery item millions of times a day across the country.

That same logic could apply just as easily to the net profit on each gallon of gasoline millions of times a day across the country... If talking net vs net profits, the cost (and ROI) on capital investments is already baked into it.

Oil pricing is market driven, not cost of doing business driven... So arguments about business costs are pretty much irrelevant to this discussion.

Except that investing in producing a can of beans is cheap, easy, and fast, while investing in producing a gallon of gas is very expensive and takes a long time, with a high failure rate.

In reply to Driven5 :

I think you are missing big chunks of Exxon's business model. You are only addressing the upstream (oil production) portion and not the downstream (refining.) Upstream is more market driven, downstream is also cost of business driven. That's a big reason why gas in CA costs so much more, aside from the taxes. 

In reply to Duke :

Walmart annual capex is $10B-$15B.

Exxon-Mobil annual capex is $15B-$25B.

Yes, as a percentage of revenue it's also greater for oil, at 2%-3% vs 6%-9%. I'm just showing that the difference isn't as significant as you seem to be implying. Remember that no capex has a guaranteed ROI either. But again, capex is part of the long range business plans and is budgeted annually as part of the operating costs used in the net margin calculation... So even if we erroneously assume that capex as a percentage of revenue be tied directly to net margin, Exxon wouldn't need to exceed the 6%-9% net margin range to functionally protect against that.

Realistically though, protecting for capex variation should be based on a percentage of the capex dollar value itself, not on a percentage of total revenue... So if Walmart needs $1B extra net profit to protect their capex investments, Exxon would only needs maybe $2B.

.

In reply to Boost_Crazy :

I'm not saying that cost of business doesn't affect pricing, and regional pricing differences, but that it's not the main driver of their inflated net margin.

In reply to Driven5 :

For 2022, I'm sure that you are correct. When crude prices climb, more margin is made on the upstream side. Most of the revenue comes from the downstream side, which is less profitable when crude prices are higher- less people buy premium at the pump. Over the years, I expect that the percent of margin from the upstream and downstream sides changes drastically. 

I work in this industry, but usually keep my $0.02 to myself.  Interesting discussion so far though.  Based on Duke's link, it looks like XOM averages 8-10% profit margin (already discussed):

https://www.macrotrends.net/stocks/charts/XOM/exxon/profit-margins

Some of the others that I often see referenced around the lunch table at work are tech (Apple, Microsoft, etc.) and pharma (Pfizer, others):

https://www.macrotrends.net/stocks/charts/AAPL/apple/profit-margins

https://www.macrotrends.net/stocks/charts/MSFT/microsoft/profit-margins

https://www.macrotrends.net/stocks/charts/PFE/pfizer/profit-margins

The tech companies made staggeringly more money than XOM, Pfizer made roughly the same amount, Verizon the same.  We don't seem to beat the media drum for them as much.  In all cases, I wonder if some trust-busting/monopoly break-up would drive competition, improve prices, and be better for society. 

I'll say it again for those that would rather get all self-righteous than understand:

RAW DOLLAR AMOUNTS MEAN JACK E36 M3 NO MATTER HOW LARGE THEY ARE.

WHAT MATTERS IS PROFIT MARGIN - PROFIT AS A PERCENTAGE OF REVENUE.

Please note how carefully articles like this avoid letting that particular cat out of the bag.  You will never see profit margin given in an article like that, because it's so much easier to generate the necessary outrage by throwing around the $B-word.

You may read how much profit grew as a percentage, but that is also completely disingenuous.  Was last year a good year?  A bad year?  If profit margin was 2% last year and this year it's 5%, you get to scream PROFITS RISE 250% ! but you conveniently don't have to mention that they still suck.

And the oil companies' profits really just aren't that excessive as cited multiple times by multiple people above.

Here's a longer-term view of these companies' profits (from last year), so you can see it isn't a matter of cherry-picking profit growth from a bad year to a good year - in absolute terms recent numbers are extremely high, thus the records being broken:



As for calculating profit margins, this looks like the most recent revenue data available for Shell:

In reply to GameboyRMH :

EXCELLENT!  Thank you so so much for posting two examples that absolutely prove my point.

The first graph looks great if you really want to hate on those greedy corporate fat cats!  I can almost smell the cigars and taste the scotch from here!

Except that first graph is utterly, totally, and completely useless for anything except generating outrage.

The only line that matters in all that information is the green line on the bottom graph:  NET PROFIT MARGIN.

It shows Shell's net profits as 11%, up from 7.7% last year.  WOW PROFITS ARE UP 70%!  GET THE PITCHFORKS!

11% is a perfectly reasonable profit margin.  It's not usurious in any way at all.  And if you average the last 4 years, that comes out to 2.8%.

Sorry, I know you really really want to make this an anti-capitalist diatribe, but it just... isn't.