Monday, May 05, 2008

Speaking of Capitalism, Wall Street isn't too happy with Exxon

marjorie says...

Regarding the news that Exxon earned more in the first quarter of 2008 than any previous first quarter, the Wall Street Journal reported in an article titled The Travesty of Exxon's Earnings:

Exxon Mobil Corp. earned $10.89 billion in the first quarter of 2008. This was clearly a travesty and must never be allowed to happen again.

Yes, that was the lead-in. If you weren't keeping tabs, you'd never know Exxon is raking it in. The WSJ went on to explain that the company just didn't earn as much as investors expected, so they began selling their shares:

After all, investors reacted to news that the largest U.S. company by market capitalization earned more in the first quarter than it had in any previous first quarter by selling the shares -- which ended down 3.6% in heavy trading Thursday on the Big Board despite a 189.87-point rally in the Dow Jones Industrial Average.

Earnings are relative, and while the shareholders of Countrywide Financial Corp. wouldn't look askance at this amount of money, the oil-and-gas behemoth disappointed investors because it fell short of expectations and presented an earnings report that shows how rising energy costs are hurting a company that makes its money from the rising cost of oil in the first place.

Just in case you're confused by the WSJ description, the New York Times obligingly gives it to us a plain in their opening to the story:

Exxon Mobil reported the second-best quarterly profit in its history on Thursday — and investors could barely hide their disappointment.

Exxon, the world’s largest publicly traded oil company, said its net income rose 17 percent in the first quarter, buoyed by high oil prices. But that was less than Wall Street expected, and Exxon’s shares fell 3.6 percent, to close at $89.70.

Well? I don't know about you all, but in the wake of the Bear Stearns (aka Wall Street) tax-payer bail-out, its pretty galling to witness the inhumanity of Wall Street in all its glory. A numbers game that has no morals, there's no mechanism in place that tempers the profit motive with a consideration of the larger collective good of society. In this case, Exxon has been sent a message that their profits are pretty much all that matter to Wall Street, the economic security of car-dependent Americans be damned. This is our capitalism, like it or not. You know the saying..."...fiddling while Rome burns."