I'm a little more skeptical of media reports than the average guy (I think). I write these blogs for two reasons. The first is to get my thoughts down and somewhat organized. The second, is I'm doing some research, and passing that on to my friends. Hopefully, if any of you don't have time to research these things, you'll find some use in my research.
Post:
I had a conversation the other day with an acquaintance at work regarding oil prices. It came up that Exxon is having record profits. It seems to be a big topic lately, because people are irate about the price of gas, and are looking for the bad guy in the situation. Just today, CNN (and Fortune) had a very misleading article on the highest profits made by companies in 2007. I say "misleading" for two reasons.
Misleading Headlines/Tag lines
First, CNN's tag line read "Exxon Mobil again tops Fortune's list of top earners. Which other companies are among the most profitable on the planet?" I clicked on it to read, and find out the Exxon is actually number 2... I guess top is a relative term.
Profit is not the same as Profit Margin
The second reason I find the article misleading, along with almost media sources is that they report straight profit, without taking into account the revenue of the company. A more equitable tool of comparison is profit margin, which relates the margin to the total revenue of the company. For instance, if I own a company, and I make $100 profit, and my friend owns a company and makes a profit of $200, and that's all anybody ever looked at, you would say my friend is doing better (and liberals would say he should have his profit taxed!). However, if we reported that my company had a revenue of $1000 and my friend's company had revenue of $4000, we get the full picture. For every dollar of product I sold, I made $.10 profit. For every dollar or product my friend sold, he made $.05 profit. (He still made more money than me, because either I was too lazy, or too dumb to market to the right people!) Thus, you see that you must compare profit margins, and not just profit.
Actual Winners
I did some digging to find out if Exxon's profit margin was out of line. What I found on Fortune's website was interesting. Fortune lists the "Fortune 1000" companies, along with their revenue and their profit. What follows are the facts. The company with the highest profit margin on their list is "Mirant" an electric energy company with a profit margin of 70.87%. You would have to scan down the list all the way to #219 to find Exxon, with a measly profit margin of 10.89%. There are 218 companies on Fortune's 1000 list that have a better profit margin than any major oil and gas company!!! Here's a list of companies that most of us are familiar with that have better profit margins that Exxon:
- Microsoft (27.51%)
- Google (25.33%)
- Qwest (21.17%)
- Coca-Cola (20.73%)
- Johnson & Johnson (17.31%)
- Northwest Airlines (16.71%) How can an airline complain about gas prices when they're making a higher profit than the gas company?
- Harley Davidson (15.20%)
- McGraw-Hill (14.97%) We all knew that we were getting robbed on our text books!
- St. Jude Medical (14.79%) This one really pisses me off... I did a "Math-a-thon" for them when I was in elementary school to help them raise money to save kids... Turns out, they're making a profit!
- Apple (14.56%)
- PepsiCo (14.33%)
- Walt Disney (13.06%)
- Abercrombie & Fitch (12.69%) This is just further evidence of the lack of intelligence of all the sheep who buy their entire wardrobe here! They are actually fleecing you!
- Anheuser-Busch (12.68%)
- Allstate (12.61%)
I think the main point here is that the oil and gas companies are not really the monsters that the media is painting them to be. With this knowledge, I feel that any liberal push to tax the profits of the oil and gas companies (a bad idea to begin with) should apply to every other company that does business in this country and makes huge profit. It would never happen... oil and gas are the "bad guys"...
3 comments:
St. Jude Medical, headquarted in St. Paul, MN and St. Jude Childrens' Hospital, located in Memphis, TN are two completely different entities. St. Jude Childrens' hospital is a not-for-profit, section 501(c)(3).
From their website:
"St. Jude Children's Research Hospital is internationally recognized for its pioneering work in finding cures and saving children with cancer and other catastrophic diseases. Founded by late entertainer Danny Thomas and based in Memphis, Tenn., St. Jude freely shares its discoveries with scientific and medical communities around the world. No family ever pays for treatments not covered by insurance, and families without insurance are never asked to pay. St. Jude is financially supported by ALSAC, its fund-raising organization. "
The government is also making a higher profit margin than the oil companies! HMMMMMMMM!
It's so true that the media (in general) twists stuff to fit their agenda! This is a great post!
Great post to bad there aren’t more people like you who put the research and thought in to things like this. Instead there are too many Sheeple mindlessly believing every word they hear on the boob-tube. I'd like to see what you have to say about Congresses recess and the fact that Republicans returned on Monday to continue debating oil/energy despite the Democrats absence and the old bag (did I say that... sorry I meant House Speaker Pelosi) turning off the lights and microphones.
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