Exxon Mobil Reports $11 Billion Profit, Denies Controlling Oil Prices

NEW YORK (AP) — Exxon earned nearly $11 billion in the first quarter, a performance likely to land it in the center of the national debate over high gasoline prices.

The world’s largest publicly traded company said Thursday that higher oil prices boosted profits 69 percent from a year ago. The result was Exxon’s best since earning a record $14.83 billion in 2008’s third quarter.

WBZ-TV’s Jonathan Elias has local reaction

Wall Street had been expecting sharply higher earnings for oil companies. Oil prices rose 17 percent in the quarter. But huge oil profits will aggravate drivers with gasoline prices averaging $3.89 per gallon nationally. President Obama wants to cut into some of those earnings by eliminating $4 billion in taxpayer subsidies for oil companies.

Exxon is taking steps to dilute any potential furor over the results. On a company blog Wednesday, the company said that it has little control over the price of oil, which is now near $113 per barrel. It also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

That may not appease many motorists and politicians, however.

The price of a gallon of gas is already above $4 in 8 states and the District of Columbia. And on Thursday, the Commerce Department said economic growth slowed sharply in the first quarter, partly because of high gas prices.

On the blog, Ken Cohen, Exxon Mobil Corp.’s vice president of public and government affairs, said the company was anticipating “the inevitable headlines and sound bites about high gasoline prices and what to do about them” after the earnings were reported. In addition to the routine post-earnings conference call with analysts, Exxon is making Cohen available this afternoon for a separate call with members of the media.

Exxon’s results followed strong profit gains by other oil companies.

Europe’s largest oil company, Royal Dutch Shell PLC, reported $8.78 billion in first-quarter profits, up 60 percent from a year ago. BP PLC’s quarterly earnings rose 16 percent to $7.2 billion.

ConocoPhillips said net income grew 43 percent to $3 billion and Occidental Petroleum Corp. said earnings climbed 46 percent to $1.55 billion.

Chevron Corp., the second-biggest U.S. oil company, is expected Friday to report a 25 percent increase to $5.69 billion.

Argus Research analyst Phil Weiss said oil companies will struggle to win over people as long as they’re making billions of dollars every quarter, even though he thinks the industry makes a reasonable argument.

“They really don’t have a lot of control” over the price of gasoline, Weiss said. “But then they get these high profits and people get upset. That’s what politicians respond to.”

Exxon reported net income of $10.65 billion, or $2.14 per share, for the first three months of the year. That compares with $6.3 billion, or 1.33 per share a year ago. Revenue increased 26 percent to $114 billion.

The results beat Wall Street estimates of $2.04 per share on sales of $112.6 billion, according to FactSet. Shares fell for

Exxon and other oil companies, however, on expectations for a continued drop in U.S. gasoline demand. On Wednesday, the Department of Energy said demand for gasoline over the past four weeks was 1.6 percent lower than a year earlier.

Exxon shares lost 44 cents to $87.34 in morning trading. Exxon increased earnings even though it produced less oil and natural gas liquids. Benchmark crude prices rose 20 percent from a year ago.

The company has increasingly focused on producing natural gas. Exxon expects natural gas to displace coal as the second most important fuel source within the next decade. Last year it acquired XTO Energy to become the largest U.S. natural gas producer. Exxon’s natural gas output rose 24 percent in the quarter, but prices declined as other companies followed its lead and rushed to develop underground shale gas deposits in North America. Natural gas prices fell nearly 16 percent from a year ago.

Earnings grew across the company’s business segments. Income from its exploration and production business gained 49 percent to $8.7 billion while the company’s downstream business, which includes refineries, posted a huge 30-fold jump to more than $1.1 billion.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • emom

    Are we even surprised by this story,,, we have seen them raise their gas prices heck the oil for your cars are more expensive too,,,, there is no need for it and they are gaining profit due to it… they are 10 cents higher than the station I regularly go to and their oil is as much as $2.00 more a quart,,,, forget it to costly in the end for me….sticking with a deal….

  • Just saying

    really? they couldn’t take 5 billion profit so that people could afford to drive? Why isn’t channel 4 broadcasting the reaction to this NEWS item? Oh right because the royal wedding is much more important.

    • Matt

      If you are trying to say that if Exxon cut their profits in half then the price of gas would be cut in half you are wrong. Gas has always had very small profit margins and will continue to do so. These profits are made on volume. The only way to cut their profits in half is to cut our oil consumption in half.

      • IronManCC

        Right on the money, Matt, no pun intended. Their profit on fuel sales is literally a couple of pennies on the dollar. Their huge profits are directly related to their huge size, in the big scheme of things, probably the largest US Corporation; but there are other companies smaller than Exxon Mobil that actually “earn” more. Exxon also has massive investments to make in research and to keep the oil flowing in the quantities that are required. Finally, they are, after all, a profit making business, not meant to merely break even or, worse yet, lose money and go under.

      • jerry

        Wake up these companys bought out all the smaller oil companys in order to drive these prices up . When congress asked about how about building more refinerys in the u.s. the big oil companys did not want to do that because if they did it would help bring the prices down at the pump . These oil companys are raping AMERICA as well as OUR OWN GOVERNMENT between the the 2 they are raping AMERICA and driving everyone into poverty because no one can save money hardly anymore due to paying these out landish prices . Our politicians are reaping the rewards as well thru payoffs they do not have to worry about gas because they fill up free on the tax payers dollors and they get everything under the sun because they are govt. workers , the get free lunches , dinners, gas, cell phones, you name it free spending accounts , free airline tickets CMON WAKE UP AND SMELL THE COFFEE ITS CALLED RAPING AMERICA FOR THERE OWN GAIN .

  • BOB

    No surprise here. I’m sure our glorious leaders will have nothing to either. The rich getting richer!!!

  • Jeff Kingston

    What’s the old playground chant…

    Liar, Liar, Pants on fire…..

    God I’m sick of American Business practices. Evil, Dirty, and Underhanded.

    God I’m sick of corporate mouthpieces… liars, liars one and all.

    Most of all I’m sick of hearing that the only ones in this economy who deserve any part of success are the “Shareholders”. What about those whose hard work and true work ethic made these companies successful to begin with, the workers.

  • Mark

    I bet that they probobly didn’t pay any taxes and more than likely got refund!

blog comments powered by Disqus
Taz Show
Download Weather App

Listen Live