More than a billion dollars a day, $45 million an hour — that's what Exxon Mobil reported in third-quarter revenue.
More than a billion dollars a day, $45 million an hour, almost $340 for every living American — that’s what Exxon Mobil reported in third-quarter revenue Thursday.
For the oil giant, that translated to $9.9 billion in net income.
The financial results drew outrage from politicians and consumer advocates who are suspicious of historically high U.S. gasoline prices.
Others, however, said the company was simply following the rules of free enterprise and reaping a bounty for high-risk investments in oil exploration in often politically unstable regions of the world.
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“This is a staggering profit and proof that we are being gouged by the oil industry,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights in Santa Monica.
Court said oil companies have strategically refrained from building new domestic gasoline refineries so that tight supplies would push up prices.
“Now Exxon needs to invest that money in making more gasoline,” he said. “Neither Exxon nor the industry has opened a new refinery since 1976 because the companies know keeping refined supply low is a recipe for huge profits.”
Certainly, political pressure is building on the industry to increase its refining capacity.
“These companies are turning in record profits — they have a responsibility to expand,” U.S. Energy Secretary Samuel Bodman said Thursday before the Senate Energy Committee. Senate Majority Leader Bill Frist, R-Tenn., called for an investigation of possible profiteering.
Exxon’s profit for the quarter topped the $9 billion reported a day earlier by Royal Dutch/Shell Group.
In a statement, Exxon Chairman Lee Raymond said his company had done its best to restore capacity after the damage inflicted by Hurricanes Katrina and Rita.
“We acted responsibly in pricing at our company-operated service stations, and we also encouraged our independent retailers and distributors to do the same,” Raymond said.
Although the numbers are big, the criticism as oil companies announce their results this week is largely unfair, said Fadel Gheit, an industry analyst at Oppenheimer in New York.
He said Exxon has at least $100 billion of capital at risk in its business and that although the industry looks flush, that has not always been the case.
“In the late 1990s, when oil was just $12 a barrel, a lot of these companies were losing money and could have gone bankrupt,” he said. “Every time they drill a hole in the ground they spend tens to hundreds of millions of dollars, and there is no guarantee there will be a return.”
All told, Exxon said, its profit last quarter was 75 percent above the $5.68 billion it recorded a year earlier; third-quarter income included a special gain of $1.6 billion from the restructuring of Exxon’s interest in a Dutch gas-transportation venture.
The $100.7 billion in revenue represented a 32 percent gain from $76.4 billion a year ago and eclipsed the previous record $88.6 billion it recorded in this year’s second quarter.
Exxon shares fell 60 cents to $55.60.