Exxon and Chevron both see profits soar
Exxon Mobil Corp. shattered its own record as the world's most profitable publicly traded corporation, as rising oil prices helped the company bring in better-than-ever income and revenue for the fourth quarter and 2007.
Irving, Texas-based Exxon's net income rose 3% to $40.6 billion in 2007, surpassing its 2006 record of $39.5 billion.
Chevron Corp. also posted strong earnings despite lower production and lagging profit from making and selling gasoline. Full-year profit at the San Ramon, Calif.-based oil company jumped 9% to $18.7 billion.
That was happy news for company shareholders, but bad news on the public relations front. The robust results, booked amid high gasoline prices and a wobbling U.S. economy, irritated consumer groups and politicians, reigniting calls to eliminate oil industry subsidies.
"Congratulations to Exxon Mobil and Chevron -- for reminding Americans why they cringe every time they pull into a gas station and for reminding Washington why it needs to act swiftly to break our dependence on foreign oil and rollback unnecessary tax incentives for oil companies," Sen. Charles E. Schumer (D-N.Y.) said in a statement.
Exxon's and Chevron's big profits "come at the cost of an economy tipping into recession," said Judy Dugan, research director for the Foundation for Taxpayer and Consumer Rights in Santa Monica. "While Exxon makes the largest corporate profit by any corporation ever, families pay $60 and more for a gas station fill-up."
Asked about the backlash, Exxon spokesman Ken Cohen sounded resigned: "At least over the last few years, our industry has always been the focus of attention. I doubt that that will change here over the short term."
Exxon and other oil companies are mindful that worldwide energy consumption is expected to jump 30% over the next 20 years, Cohen told reporters during a conference call. "The challenge for all of us in the industry is how do we meet that increased demand and do it in a way that is also consonant with people's expectations in the environmental area and in other areas? That's what our company is focused on doing."
To that end, the company said it spent $20.9 billion on exploration and other projects in 2007, up 5% from 2006 and a record high for Exxon. It distributed more than that, $35.6 billion, to its shareholders through dividends and stock buy-backs during the year.
