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Home » Archives » May 2011 » Exxon villainized again

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05/24/2011: "Exxon villainized again"

Letter to the Star Phoenix.

Update: Published as Oil profit sharing. Too bad they didn't correct the (admittedly small) typo in the industry average figure after I told them about it.

In the past two weeks there have been three articles in this newspaper (May 13, May 19) decrying how gas companies are making incredibly large profits. In the latest one, C.R. Broomfield (SP, May 24) complains that Exxon made almost $11 billion in its last quarter.

It's worth putting that figure into a little perspective, however. In their last quarter, Exxon's total revenue was $114 billion and profits were $10.65 billion, resulting in a profit margin of just 9%. This is above the industry average of 6.5%, but still ranks it below the average of almost 60 other industries (according to Yahoo finance). This profit amounts to just over 2 cents per gallon sold in the USA.

Also, these profits aren't just accrued to the Exxon company itself, disappearing only into the pockets of the super rich. Those profits are distributed to all the shareholders. If you own shares in a mutual fund, there is a very good chance you too are an indirect owner of Exxon and have received profits from them.

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