DISCLAIMER: Most of the next 10 days’ posts were written a week or more ago.
A few weeks ago this company reported record 2nd quarter revenues of $24.67 billion and record second quarter profits of $5.99 billion. That is $67 million per day of profits! It’s net profit margins were an astounding 24.3% for this quarter and its gross margins over 40%. Its profits increased by 95% over a year earlier and the company expects its next quarter to be even better. It did this in part by increasing its core product pricing by over 8% over a year earlier, all during a time when stagnating pay and employment are squeezing Americans like no time in recent history.
As the company reaps these record profits, it earns nearly 60% of its revenues from sales outside of the United States and regularly takes advantage of tens of millions of dollars of tax breaks afforded it by a radically free-market oriented Congress. Not only that, many of the company’s core products are made in countries hostile to US interests and its inputs are comprised of some of the most scarce global commodities, all of which American companies increasingly rely on from abroad.
When surveyed about this situation, Americans blamed the typical corporate greed that has been sanctioned since the Reagan “revolution” of the 1980s. The company is, of course, Apple. What greedy bastards. Here is some more on Exxon. And here. And here.
ExxonMobil’s annual report is a great read as far as annual reports go.
The governments they pay taxes to are like a special class of preferred stockholders, getting a big annual chunk of pre-tax net income. One wonders why the political class is not happy with that arrangement, which does not involve any purchase of stock at all.
True, calculating net income in the oil business is a complicated matter, since many cash outlays get capitalized and depreciated according to prevailing accounting standards. But all those rules have been made to treat the company fairly, while at the same time increasing taxable income for the government, which risks none of its capital.
At first, I was expecting this to be an article on the Fed Reserve.