10-12% Profit?

[kenimpzoom]

Am I doing something wrong or is Shell and Exxon only making 10-12% profit? Not a very good margin, just lots of volume.<br /><br />Ken<br /><br /><br />***************************<br />Royal Dutch Shell PLC, one of the world's largest oil companies, said Thursday its third-quarter profit grew 67 percent to $9.39 billion, as soaring oil prices outweighed lost production and damage to rigs from hurricanes in the Gulf of Mexico. Revenue rose 8 percent to $76.44 billion.<br /><br />***********************<br />Exxon Mobil Corp. had a quarter for the record books. The world's largest publicly traded oil company said Thursday high oil and natural-gas prices helped its third-quarter profit surge almost 75 percent to $9.92 billion, the largest quarterly profit for a U.S. company ever, and it was the first to ring up more than $100 billion in quarterly sales.

 

[QC]

Re: 10-12% Profit?

What type of net margins would you expect? Gross margins, yes low, but net it actually seems high to me for a commodity type biz.<br /><br />BTW, for anybody ready to pounce. I do not support regulating the oil biz.

 

[kenimpzoom]

Re: 10-12% Profit?

Here is another one.<br /><br />Wal-Mart, which last year earned nearly $10.3 billion on sales of $285 billion, has seen its stock fall 21% from its 52-week high of $57.89 last November.<br /><br />I calculate that to 3.6% profit. Pretty slim margins.<br /><br />I have always been told to shoot for 20% margins.<br /><br />I agree that 10-12% is pretty good, but its not the evil amount that everyone thinks they make. I would imagine if you asked the average person on the street, they would guess 50% profit.<br /><br />Ken

 

[QC]

Re: 10-12% Profit?

KIZ,<br /><br />I still think you are missing the diff between Gross and Net margins. In manufacturing businesses we shoot for over 50% gross margins while in a distributorship 20% gross margins are reasonable and maybe even high. It is net margins that are reported, i.e. after people, travel, the buildings, insurance, taxes, etc. etc. Many bizzes live off of less than 2% net margins.

 

[kenimpzoom]

Re: 10-12% Profit?

Yep I understand the difference.<br /><br />My point wasnt really that, my point is that these companies arent making a lot of profit for every dollar spent. Many people claim these guys are raking in record profits, and while the volume is high, the % is pretty reasonable.<br /><br />I think the average person wouldnt be happy selling 10 dollar shoes and only making 1 dollar profit from it.<br /><br />Ken

 

[Limited-Time]

Re: 10-12% Profit?

KIZ,<br />Depends on a lot of different issues but as a general rule, smaller companies tend to generate a bigger profit margin than larger ones. Ex: When I worked for a small company, (around 4 Million in annual sales) our goal was 20% or better gross profit per year. <br />My experience in a larger corp., (around 60 million annual sales) any thing over 10% gross was great. <br /> Additionally in my discussion with the higher ups it was indicated that’s generally how it goes. My .02 FWTW

 

[kenimpzoom]

Re: 10-12% Profit?

Here is a presentation explaining my point.<br /><br /> http://api-ec.api.org/filelibrary/ACF8C.doc <br /><br /><br />If profits are evil, I think banks are the most evil companies on the earth.<br /><br /><br />Ken

 

[PW2]

Re: 10-12% Profit?

At the risk of sounding like an evil conservative, free markets demand that profit margins be as high as possible. If profits get too high, that is a signal that new production is needed, and it will fill the gap in supply, shrinking the price and the margin.<br /><br />Free markets moderate themselves

 

[Fly Rod]

Re: 10-12% Profit?

Call it what ya want: Gross Profit; Net Profit;Retained Profit!!!! <br /><br />The bottom line is in Layman terms "Robbery" by the oil companies regardless of a 10-20% profit!!!<br /><br />Jesse James had a gun!!! OPPS!!! I'm sorry so do the oil companies, that nozzle on the pump looks something like a gun!!!!<br /><br />10 billion in profit, They should be regulated!!!

 

[QC]

Re: 10-12% Profit?

At the risk of sounding like a nice conservative, very well put PW.

 

[kenimpzoom]

Re: 10-12% Profit?

Fly Rod, remember, Exxon and Mobil used to be two different companies.<br /><br />They set a record cause they merged.<br /><br />Ken

 

[mattttt25]

Re: 10-12% Profit?

in the construction industry, we are very happy to average 5-7% profit. Of course, some projects break even or lose, and some make 20%.<br /><br />most cm work is negotiated at 5% profit, no more no less.

 

[Fly Rod]

Re: 10-12% Profit?

Yes and now they are one "BIGGGGGGGGGG Conglomerate"!!!! Laughing all the way to the bank with their rolled up one thousand dollar bill cigar!!!! That is only one quarter and they have made almost 30 billion in profit in a year!!!!<br /><br />We are only picking on one company, but Shell has also made billions!!!!<br /><br />Any company should be able to make a profit, but not rake ya over the hot coals!!!!<br /><br />And to make matters worst President Bush signs an order giving big oil a bigger tax break!!!!

 

[kenimpzoom]

Re: 10-12% Profit?

Hmmm.. I guess your level of profit that is evil is lower than mine.<br /><br />Glad you arent a regulator of my business.<br /><br />Ken

 

[bekosh]

Re: 10-12% Profit?

Originally posted by Fly Rod:<br /> Yes and now they are one "BIGGGGGGGGGG Conglomerate"!!!! Laughing all the way to the bank with their rolled up one thousand dollar bill cigar!!!! That is only one quarter and they have made almost 30 billion in profit in a year!!!!<br /><br />We are only picking on one company, but Shell has also made billions!!!!<br /><br />Any company should be able to make a profit, but not rake ya over the hot coals!!!!<br /><br />And to make matters worst President Bush signs an order giving big oil a bigger tax break!!!!

Isn't it awesome!! <br />My 401k is just raking it in with energy stocks.

 

[bekosh]

Re: 10-12% Profit?

Opps! Wrong button!