2 thoughts on “Wrong in Every Way

  1. Exxon makes 10% profit margins. That’s pretty typical for big business…most big electronics, manufacturing, and chemical companies make around 10% profit. I work for a very large aerospace company, and our profit margin is about 12%, more than Exxon’s…yet our customers aren’t accusing us of being unfair. The gross numbers are staggering, but profit has to be ultimately be viewed relatively. Small relative profit is easily wiped out by small mistakes and market downturns. Very large profit usually isn’t stable. That’s why 10% is generally considered a healthy margin. The reason Exxon’s profits are so obscenely large in the absolute sense is they sell an obscene volume of product. If my company moved the same value of aircraft parts, we’d make more money than Exxon.

  2. By the way, profit margins of various oil companies for last quarter (I was slightly off on Exxon Mobile):

    Exxon: 9.2%
    BP: 7.7%
    Chevron: 7.8%
    Royal Dutch Shell: 8.4%

    You know why Exxon’s stock just fell? Their five year average is 10.6%. That means Exxon is currently making less money on each dollar it invests than it has been doing.

    It’s not that atypical. For comparison, IBM made 10.9% profit last quarter, and no one’s calling for their heads.

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