Friday, August 05, 2011

Big Eight Computer Reported Huge Profits in Q2

Big 5 - Q2 2011Sales (b)Profits (b)Profit MarginTax Rate
Exxon$125,486$10,8988.68%41.47%
Shell$124,562$8,7597.03%41.19%
Chevron$68,948$7,76011.25%41.24%
BP$103,848$5,6205.41%35.10%
ConocoPhillips$65,627$3,4025.18%44.91%
Totals ($) / Avg. (%)$488,471$36,4397.46%40.80%
Big 8 - Q2 1011
Apple$28,570$7,31025.59%23.46%
Microsoft$17,370$5,87033.79%7.05%
IBM$26,666$3,66313.74%25.03%
Intel$12,847$3,16024.60%27.71%
Google$9,030$2,50027.69%18.83%
HP$31,632$2,3047.28%20.33%
Cisco$10,866$1,80716.63%16.81%
Dell$15,017$9456.29%19.23%
Totals ($)/Avg. (%)$151,998$27,55925.08%19.81%
Sources: Yahoo! Finance and MSNBC

U.S. companies have been reporting second quarter earnings recently, and as usual, it's open season for the usual media attacks on America's big oil companies.  For some balance, here's some editing of a recent Huffington Post article "Big  Oil Computer Companies Post Huge Profits On High Gas Prices Strong Consumer Demand:" 

WASHINGTON -- The sputtering economy, high unemployment rate and punishing gas prices are taking a huge toll on average Americans, but at least somebody is doing well: The Big Five oil Big Eight computer companies (see list above) this week announced they had made a whopping $36 $28 billion in profits in the second quarter of 2011.

According to second-quarter earnings reports, ExxonMobil Apple, Inc. alone made $10.7 $7.3 billion in the most recent three months. That's a 41 a whopping 138 percent increase over the same period last year and an 161 astronomical 504 percent increase over 2009.

A good chunk of these profits is coming right out the pockets of the American public, thanks in part to astronomical gas prices and to $4 billion to $8 billion a year in deficit-increasing tax subsidies that oil companies continue to get, long after the incentives those subsidies were designed to create ceased to make economic sense. stong demand from consumers for Apple's incredibly successful new products like the iPad and iPhone.  

Compared to other industries like U.S. major oil and gas producers in the Big Five (see list above), the Big Eight enjoyed much higher profit margins on average (25%, or more than three times the average 7.5% for the Big Five, see chart above) and also benefited from much lower overall income tax rates (19.81%), less than half the rate for the Big Five (40.8%). 

24 Comments:

At 8/05/2011 11:41 AM, Blogger Benjamin said...

Perhaps it is time to eliminate the corporate income tax--and for the Fed to get aggressive about sustaining growth.

Now is the time for a sustained push by Bernanke to get the economy going.

The right-wing needs to drop its obsession with minute rates of inflation and go back to George Gilder--what is important is business creation, low business taxes and regs and economic growth. Moderate inflation is not AIDS--in fact, Gilder says it is normal to robust growth.

This fetish for minute rates of inflation is the key mistake made by the right-wing and Bernanke since 2008. Now, we are paying with extremely slow growth and perhaps a pending contraction.

Japan has shown the way--to becoming an eclipsed nation with a declining population and prospects.

Sheesh, give me 5 percent annual inflation for five years, and 5 percent annual real growth. We will be on top of the world again.

 
At 8/05/2011 11:53 AM, Blogger Matt Young said...

Silicon vs Oil really is the battle. Silicon intelligence replaces brute force oil. But more Silicon intelligence also make more utility for oil.

 
At 8/05/2011 12:14 PM, Blogger Paul said...

Benji,

"The right-wing needs to drop its obsession with minute rates of inflation and go back to George Gilder-blah, blah, blah..."

It's always the right-wing that is the problem in your demented world. How about your boyfriend ease up on his war on capitalism? Prof Perry's post is about the left's demonization of oil companies. Your boyfriend is the grand champion of that. Nothing to say about that, Benji boy?

Incidentally, I'm still unclear whether you are still grading his economic performance with a "C"? If not, what made you fall out of love?

 
At 8/05/2011 12:52 PM, Blogger Benjamin said...

Paulette:

Obama gets a "C" --the real game is monetary.

Yes, I wish Obama would talk about wiping out the corporate income tax, and being a "pro-business" Dem. Obama is missing a historic opportunity--just as I wished Bush jr. had declared after 9/11 that we needed a revamped, streamlined military for the much smaller terrorist nuisances we face today, and not an ossified lumbering bloated Cold War boondoggle force.

Yet it was Bush jr. that took a healthy economy and confident nation, and in eight years reduced us to rapidly shrinking economy, a collapsed financial system, and two endless wars for nothing.

Bush jr. engineered a train wreck into a sewage treatment plant.

Obama has not made things much better or worse. He is on over his head, probably. And he talks to fiscal debt-lovers. I wish Obama would talk to George Gilder.

But mostly, it is Bernanke-san who has to get strong and confident.

 
At 8/05/2011 12:57 PM, Blogger Junkyard_hawg1985 said...

Mark,

Excellent Post!

 
At 8/05/2011 1:00 PM, Blogger Trey said...

What's the reason for the lower overall income tax rates for the Big Eight, even though their profit margins were larger?

 
At 8/05/2011 1:05 PM, Blogger Che is dead said...

"Perhaps it is time to eliminate the corporate income tax ..." -- "Benji"

I strongly doubt that you will actually managed to sell your lefty friends on the idea of eliminating the corporate income tax.

"Benji" finally says something that makes sense and then he feels compelled to follow it with an avalanche of stupidity. Baby steps.

 
At 8/05/2011 1:28 PM, Blogger Paul said...

Benji,

"Obama gets a "C" --the real game is monetary."

Incredibly wrong on both counts, but what earns him that C? The deficit? Unemployment? Growth rate?Obamacare? Dodd-Frank? Drilling moratorium? His ruinous spending? Show your work, Benji boy.

Any honest critique would give your loser boyfriend an "F", but only because that's the lowest grade possible. You round him up to a "C" because your A+ man love outweighs his horrific job performance.

 
At 8/05/2011 1:34 PM, Blogger Paul said...

Oh, I loved this:

"Yet it was Bush jr. that took a healthy economy and confident nation, and in eight years reduced us to rapidly shrinking economy, a collapsed financial system, and two endless wars for nothing.:

Bush gets all your blame for his economic program -the Fed had no role there- but you absolve your boyfriend's wrecking ball because, "the real game is monetary."

 
At 8/05/2011 2:37 PM, Blogger morganovich said...

"the real game is monetary"

aside from being completely wrong (real gdp takes out inflation) you also draw all the wrong conculsions.

high inflation does not drive high real growth. never has, never will.

it should never be the job of a central bank to drive growth.

that's how we get one trick pony fools like greenspan and bernanme and the concatenated crashes they create.

the drown us in money, and the imbalances never get resolved.

the loose money and absurd credit of 2001-7 is what made this mess.

the next one is going to be even worse.

rather than just trying to demonstrate how stupid you are on japan despite having been shown the facts over and over, i'll just post the link again.

this is called MATH.

http://www.cirje.e.u-tokyo.ac.jp/research/workshops/macro/macropaper04/miyao.pdf

there is no correlation between money growth and gdp growth in japan. read the math yourself.

you repeat this same foolish mantra over and over, but it's as wrong now as it was then.

strong yen coincides with strong Japanese growth for 20 years.

you have the memory of a goldfish.

you do realize that repeating nonsense over and over does not make it true, right?

 
At 8/05/2011 2:39 PM, Blogger morganovich said...

and how does the fed "sustain growth" anyway?

what you are championing is not even possible.

 
At 8/05/2011 2:40 PM, Blogger morganovich said...

. Now, we are paying with extremely slow growth and perhaps a pending contraction.

no, we are now paying for loose money and reckless government with 70's style stagflation.

notice how inflation has been rising and growth falling for the last couple quarters?

how do you explain that?

 
At 8/05/2011 3:27 PM, Blogger Benjamin said...

Morgan-

Fresh off of your flying saucer, back from Proxima Centauri, and you find inflation?

The core CPI YOY is under 2 percent.

Your fetish for ultra-low inflation rates is misplaced. You should advocate growth, by nearly any means necessary.

BTW, Martin Feldstein, Reagan's Chairman of the CEA, and now Harvard prof says inflation has been under 3 percent for the last 10 years--you can check out his op-ed in the WSJ. That follows on the heels of Professor Donald J. Boudreaux was the Chairman of the Department of Economics at George Mason University in Fairfax, Virginia, from August 2001 to August 2009, who says the CPI overstates inflation.

These guys are right-wingers--if they got any more right-wing they would be wearing little mustaches and having arm spasms when they heard martial music.

Besides, if we have been having 10 percent inflation a year for several years, that means our living standards have fallen way off. And that means socialist Europe now has higher living standards than we do, and six weeks of vacation a year, and universal health care. Plus, their cities and food are nicer than ours.

Or, you will get back in your Flying Saucer and go to Europe (across the Atlantic, takes about 12 minutes) and report that they too are rigging reported inflation.

It's a global conspiracy! Organized by Vincent Foster! Jimmy Hoffa is providing the security, and he kills anyone who reports about it!

Obama has not birth certificate--he is from Mars, and worships Lucifer!

 
At 8/05/2011 3:30 PM, Blogger Paul said...

Hey Benji, your C average boyfriend just announced his plan to "..create jobs right now." And the plan is...extend unemployment benefits! C average, baby!

By the way, you should probably let him know it's bad form to be leading a conga line at the White House while the stock market is crashing and people are losing their nest eggs.

 
At 8/05/2011 3:37 PM, Blogger randian said...

Moderate inflation is not AIDS--in fact, Gilder says it is normal to robust growth.

In that respect Gilder is an idiot. Robust growth normally causes deflation as everything gets cheaper. That's exactly what happened before the Fed was created. Instead of rising wages we had falling prices (which pretty much amounts to the same thing, economically speaking).

 
At 8/05/2011 3:49 PM, Blogger Benjamin said...

Randian-

The 1980s and the 1990s, and even through 2007, the world saw more wealth and income created than ever--literally billions of people obtained higher living standards, including in the USA.

The gold standard, as Milton Friedman said, is for guys who want to tunnel around like moles in the ground. Spain had a gold standard, and they had all the world's gold for a while--and they went kaput for a couple hundred years.

Let your wife worship gold--modern-day economies need a money supply.

 
At 8/05/2011 4:05 PM, Blogger randian said...

Let your wife worship gold--modern-day economies need a money supply.

Manipulating the money supply to create inflation is nothing less than the government stealing from its citizens to finance its own debt. As I said, deflation, not inflation, is the norm of a growing economy. That, however, doesn't allow the government to spend itself and us into oblivion.

 
At 8/05/2011 4:30 PM, Blogger Benjamin said...

Randian-

The GDP deflator in Japan is down 15 percent (15 percent deflation) since 1990. Property values and equities are off 75-80 percent in that time frame.

The flag of Japan is now of the setting sun, a nation depopulating, with an economy shrinking relative to the world.

The yen has strengthened for the last 20 years--proof that having a "strong" currency is good for--well bragging rights I guess. Nice overseas vacations. But death on an economy.

China has managed their money supply to encourage growth. They are booming, and chugged easily through the last global downturn.

 
At 8/05/2011 5:25 PM, Blogger PeakTrader said...

It seems, Morganovich likes to blame Greenspan's monetary policy or Reagan's fiscal policy for the mass destruction by politicians like Chris Dodd and Barney Frank.

Why not keep it even more simple and just blame it all on Bush?

 
At 8/05/2011 8:55 PM, Blogger Ron H. said...

"Hey Benji, your C average boyfriend just announced his plan to "..create jobs right now." And the plan is...extend unemployment benefits! C average, baby!"

Mind boggling. Simply stunning.

"By the way, you should probably let him know it's bad form to be leading a conga line at the White House while the stock market is crashing and people are losing their nest eggs."

meh...let them eat cake!

 
At 8/05/2011 9:23 PM, Blogger Bobby Caygeon said...

"It seems, Morganovich likes to blame Greenspan's monetary policy or Reagan's fiscal policy for the mass destruction by politicians like Chris Dodd and Barney Frank."

ding ding ding - winner! and, yet, in the "C" rated economy of our incompetent POTUS it is those same people that are handed the responsibility to reform and regulate all the problems they were party to.

it is amazing that people like Benji exist. he has to be getting paid, nobody can possibly be this myopic and ignorant.

 
At 8/06/2011 2:06 AM, OpenID aboutdebtloans said...

its all just about oil..duh

 
At 8/06/2011 2:23 AM, Blogger PeakTrader said...

You know the U.S. is in bad shape when communists instruct us how to run our economy.

Obama not only is imploding the U.S. economy, but also the world economy.

China blasts U.S. over debt problems, calls for dollar oversight
23 mins ago

SHANGHAI (Reuters) - China roundly condemned the United States for its "debt addiction"...and said the world needed a new stable global reserve currency.

In a harshly-worded commentary...China gave its first official comments on the United States losing its gilded AAA long-term credit rating from Standard & Poor's.

China urged the United States to apply "common sense" to "cure its addiction to debts" by cutting military and social welfare expenditure.

"The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone," Xinhua wrote.

 
At 8/06/2011 6:26 PM, Blogger juandos said...

Hey pseudo benny, do you ever feel a bit silly when you rant the following? "Yet it was Bush jr. that took a healthy economy and confident nation, and in eight years reduced us to rapidly shrinking economy, a collapsed financial system, and two endless wars for nothing"...

So you think its a good thing that the unemployment rate today is double that of when George W was in office?

So you think its a good thing that the price of gasoline today is double what was when George W was in office?

So you think it was a good thing that Obama spent more in the first 19 months of his regime than was spent from Washington to Reagan combined?

How do you rationalize all that failure as a good thing pseudo benny?

Curious minds want to know...

Mind you, George W was hardly a Constitutional conservative in his own right but still the differences are start to become more than a bit stark...

 

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