Thursday, October 30, 2008

Hard Times? What Hard Times?

Exxon Mobile has shattered its own mind boggling record and posted profits of $14.83 BILLION for 3Q08! After you deduct $170 million in punitive damages from the Valdez spill and $1.62 billion from the sale of a natural gas transportation business, that's still $13.38 BILLION in profit.

They benefited mightily from the inflated crude prices that reached $147.27 a barrel at one point. One can only hope that the current price of crude, around $68 a barrel, will bring their profits down a little. I have no problem with them making money. I have real issues with them making obscene amounts of money while the rest of us struggle to heat our homes and put gas in the car.

And speaking of the Valdez, Exxon fought punitive damages all the way to the Supreme Court. The original judgment was for $5 billion, at the time, one year's profit for the company. After various appeals dropped the price to $2.5 billion, in June of this year, nearly two decades after the accident, the Supreme Court vacated that judgment, saying those costs were excessive and set the punitive damages at $500 million. So, Exxon's still paying off their final judgment, a measly $170 million at a time. That's 1% of their profit this last quarter. Must be a real hardship for them. They recouped nearly all the $2 billion they spent in cleanup and settlements from various lawsuits from insurance related to the loss of the tanker. Am I the only one who thinks this is crazy?

So, Exxon pulls in billions in profit but still can't pay off $500 million in damages in a single payment. What, are they worried the check will bounce?

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