Thursday, May 12, 2011

Oil Industry Profit Margin Ranks #114 out 215

The table below shows industry rankings for net profit margin (profits / sales) of the top 114 industries out of 215 total industries during the most recent quarter, from Yahoo!Finance.  

The top five oil companies (Chevron, Shell, BP, ExxonMobil and ConocoPhillips) are part of the "Major Integrated Oil and Gas" industry, and the CEOs of the "Big Five" are appearing today before the Senate Committee on Finance, to get grilled about the "taxpayer subsidies" and "tax breaks" they receive, explain why they deserve to earn record "windfall" profits, and explain the role they play in higher oil and gas prices.  

As the table below shows, the Integrated Oil and Gas industry made an average profit of 6.2 cents per dollar of sales, which ranks #114 out of 215 industries by profit margin, and puts oil companies right in the middle of industries by profitability.  

If the Senate Finance Committee wants to investigate "excessive" or "windfall" profits, they might consider going after some of the other industries that have benefited from higher commodity prices and achieved much higher profit margins than oil (at 6.2%), like silver (44.7%), copper (24%),  gold (21%), and industrial metals (21%) and lumber (17.7%).   


RankIndustryNet Profit Margin
1Closed-End Fund - Equity81%
2Publishing - Periodicals51.7
3Silver44.7
4Closed-End Fund - Foreign38.3
5REIT - Diversified36
6Copper24
7Internet Information Providers23.8
8Application Software22.7
9Foreign Utilities20.5
10Industrial Metals and Minerals20.1
11Gold20.1
12Cigarettes19.8
13Semiconductor - Broad Line19.2
14REIT - Healthcare Facilities19.1
15Lumber, Wood Production17.7
16Semiconductor - Integrated Circuits17.6
17Diversified Investments17.5
18Healthcare Information Services16.6
19Beverages - Brewers16.5
20Regional - Southwest Banks16.4
21Semiconductor- Memory Chips16.1
22Publishing - Books16.1
23Networking and Communication Devices15.7
24Drug Manufacturers - Major15.4
25Long Distance Carriers15.2
26Railroads15
27Beverages - Wineries and Distillers14.9
28Nonmetallic Mineral Mining14.6
29Beverages - Soft Drinks14.3
30Wireless Communications14.1
31Semiconductor Equipment and Materials14.1
32Personal Products13.9
33Personal Computers13.9
34Medical Instruments and Supplies13.9
35Drug Manufacturers - Other13.6
36Security Software and Services13.2
37Property and Casualty Insurance13.2
38Agricultural Chemicals13
39Specialty Chemicals12.7
40REIT - Residential12.7
41Biotechnology12.7
42Medical Appliances & Equipment12.6
43Technical and System Software12.5
44Mortgage Investment12.5
45Entertainment - Diversified12.5
46Air Services, Other12.4
47Diversified Electronics11.9
48Processed and Packaged Goods11.5
49Foreign Regional Banks11.5
50Water Utilities10.9
51Semiconductor - Specialized10.5
52Money Center Banks10.5
53Consumer Services10.5
54Broadcasting - TV10.5
55Regional - Midwest Banks10.4
56Toys and Games10.1
57Textile - Apparel Footwear 10.1
58Restaurants10
59Investment Brokerage - National10
60Oil and Gas Drilling and Exploration9.9
61Paper and Paper Products9.8
62Foreign Money Center Banks9.8
63Regional - Northeast Banks9.7
64Business Software and Services9.7
65Synthetics9.5
66Scientific and Technical Instruments9.5
67Data Storage Devices9.5
68Internet Software and Services9.4
69CATV Systems9.3
70Specialty Eateries9.2
71Telecom Services - Domestic9.1
72Specialized Health Services9
73Diversified Computer Systems9
74Savings and Loans8.9
75Internet Service Providers8.9
76Conglomerates8.8
77Research Services8.7
78Diversified Machinery8.7
79Education and Training Services8.4
80Independent Oil and Gas8.3
81Industrial Equipment and Components8.2
82General Entertainment8.2
83Diversified Utilities8.1
84Asset Management8.1
85Accident and Health Insurance8.1
86Information and Delivery Services8
87Gas Utilities8
88Business Services8
89Telecom Services - Foreign7.9
90Oil  and Gas Equipment and Services7.9
91Insurance Brokers7.8
92Cleaning Products7.8
93Steel and  Iron7.7
94Drug Related Products7.7
95Home Furnishing Stores7.6
96Diagnostic Substances7.6
97Auto Parts Stores7.3
98Industrial Electrical Equipment7.2
99Waste Management7
100Confectioners7
101Aerospace/Defense - Major Diversified7
102Publishing - Newspapers6.9
103Jewelry Stores6.9
104Home Health Care6.9
105Computer Based Systems6.9
106Pollution & Treatment Controls6.8
107Lodging6.8
108Communication Equipment6.7
109Aerospace/Defense Products & Services6.6
110Sporting Activities6.5
111Packaging & Containers6.5
112Catalog & Mail Order Houses6.5
113Drugs - Generic6.3
114Major Integrated Oil and Gas6.2

24 Comments:

At 5/12/2011 9:17 AM, Blogger Rufus II said...

Sure, they're allowed to write off their major overseas "cost of doing business" (ie Royalties paid to Sovereign Governments) as "Income Taxes."

Then, they deduct their new-found "Income Taxes paid Overseas" from their Income Taxes owed, here, giving them, in many cases, NO tax liability, here.

The fact remains, they don't pay "Squat" to Our Treasury. Their Military protection in the Persian Gulf, and elsewhere, is paid for by ME and THEE, while the profits go to Warren Buffet, who pays a whopping 15% on same.

It Stinks.

Here's the deal. Corporations are paying 6% of the taxes paid (vs 13% in 2007, and 30% back in the fifties. Current Issue: treas.gov

You can't run a railroad this way, folks.

 
At 5/12/2011 9:19 AM, Blogger Walt G. said...

Where would the oil companies rank if a dollar metric was used for net profits instead of a percentage?

Dollar signs get people's attention more than percent signs. People's attention turns into votes, and that gets Congress' attention. Congress wants to get re-elected, so they hold showboat inquires into something they really can't do anything about. This circle will inevitably go on until people get rid of their unrealistic expectations.

galop47: Corporations don't pay taxes. People do.

 
At 5/12/2011 9:23 AM, Blogger Rufus II said...

Walt, Corporations were invented to limit "risk." Not to avoid Taxes.

 
At 5/12/2011 9:26 AM, Blogger Rufus II said...

Walt, I pay the costs (military, infrastructure, education, healthcare, etc) and Warren Buffet gets the Profits, and pays 15% Income Tax.

Personally, I'm sick of it.

 
At 5/12/2011 9:53 AM, Blogger Bobby Caygeon said...

Um Walt, dollar signs are meaningless in comparison across industries. It is called a relative value.

What is more valuable to you as an investor a $50mm revenue company with $1mm in net income or $5mm revenue company with $2mm in net income?

I can't believe this even has to be explained. No wonder the real facts are lost on everyone in the narrative.

 
At 5/12/2011 9:53 AM, Blogger Walt G. said...

galop47: Can you send me a picture of Mr. Corporation from Exxon? I will send you one back of me pumping gas into my truck. We can then figure out which one of us is actually paying the tax.

Your shareholder (Buffet) and corporate tax complaints are two different arguments that cannot be combined into one.

 
At 5/12/2011 10:00 AM, Blogger Che is dead said...

The fact remains, they don't pay "Squat" to Our Treasury. - galop47

The only fact established here is that you don't know your ass from your elbow:

"Despite the hyperbolic rhetoric from some lawmakers and interest groups, the facts do not support a claim that the oil and gas industry in America is under-taxed. Hard data from the Energy Information Administration show that governments in the U.S. (and even those abroad) are hugely depen­dent upon the direct and indirect taxes paid by the largest consolidated oil companies."

"Indeed, since 1981, when the failed wind­fall profits tax was first enacted, federal, state, and local governments in the U.S. have col­lected more in taxes from the oil industry than the industry has earned in actual profits for its shareholders. For example, after adjusting for inflation, the combined net earnings (net of taxes and expenses) for the largest petroleum companies between 1981 and 2008 totaled $1.4 trillion. By contrast, the total amount of taxes collected by U.S. governments from the oil companies topped $1.95 trillion, roughly 40 percent more than the industry's combined profits. Tax collections exceeded company prof­its in 23 of the 27 years surveyed."

The Tax Foundation

But, hey, not to worry, the eeevvilll oil companies have got the message and are running just as fast as they can from your filthy, grasping, greedy little hands:

"Over the past six months companies including offshore drilling contractors Noble Corp and Transocean, energy-focused engineering group Foster Wheeler and oilfield services company Weatherfield International have all announced plans to shift domicile to Switzerland."

"Switzerland has a stable and developed tax regime and a network of tax treaties with most countries where we operate", Transocean Chief Executive Bob Long said in a statement in October, when it announced its move. "As a result, the redomestication will improve our ability to maintain a competitive worldwide effective corporate tax rate."

Reuters

The left will never understand the true nature of their folly until the boot that they have been fashioning is pressed firmly against their own necks. So, let's subject the industries and activities that they support - entertainment, publishing, unions, legal services, etc - to the same level of crippling taxation and regulation that they tirelessly work to impose on those industries that they demonize and seek to destroy. Yeah, yeah, this goes against free market principles and two wrongs do not make a right, but until these morons get a full taste of their own medicine they will continue to undermine the foundations of our culture and prosperity.

 
At 5/12/2011 10:04 AM, Blogger Rufus II said...

No, it all fits in together, Walt. We are not collecting enough money to "Run a Country."

And, One of the reasons we're not is, we're not getting enough money from the ones that are benefitting the most.

Clinton had us in pretty good shape. Since Bush, it's been pretty much downhill.

 
At 5/12/2011 10:06 AM, Blogger Walt G. said...

Bobby Caygeon:

My point is the dollar amounts are not meaningless to Congress’ constituencies. Many of those people do not read Carpe Diem :-) If you were a campaign manager, what would you advise your client to do?

 
At 5/12/2011 10:19 AM, Blogger Walt G. said...

galop47: Even a 100% tax rate on millionaires will not solve our problem. If you want a lot of money, you have to tax a lot of people. If you want to know who will pay for increased corporate taxes, look in the mirror. Politicians have to disguise and demonize corporate taxes to make them palatable to the masses that are actually paying them.

 
At 5/12/2011 10:26 AM, Blogger juandos said...

"Personally, I'm sick of it"...

Well there's always Sweden for socialists galop47...

Only in the eyes of a progressive should one entity pay more in taxes than any other entity...

"Clinton had us in pretty good shape. Since Bush, it's been pretty much downhil"...

Good one galop47!

Still embracing the myth, eh?

 
At 5/12/2011 10:50 AM, Blogger Bobby Caygeon said...

@galop

you lose all credibility when stating "we don't collect enough to run a country".

we have a spending problem, not a revenue problem. the problem is almost every politician (especially on the Dem side of the ledger) has purchased their votes with unsustainable public program and entitlement commitments. because of this, what needs to be done is politically untenable.

 
At 5/12/2011 11:07 AM, Blogger Benjamin said...

Galop47-

When Clinton left office, we were a confident nation, running budget surpluses. Under Clinton, the DJIA had quadrupled.

Eight years into Bush jr, our financial system had collapsed; the DJIA was lower than when Bush jr. got in; we were trapped into endless wars with a $3 trillion pricetag; the World Trade Center was smoldering; and bin Laden was living in a mansion with three young wives. But Bush jr. was wearing military costumes.

Two years into Obama, and the DJIA is back above 1999 levels; we are nearly out of Iraq and Afghanie maybe soon; bin Laden is dead; and our financial system has largely been repaired. Obama is stilled dressed in civvies.

Bush jr. had the hunting skills of Dick Cheney, And that dog don't hunt.

Truthfully, Obama is probably only a mediocre President. But he follows the worst President maybe we ever had.

 
At 5/12/2011 11:08 AM, Blogger geoih said...

Walt G., well argued.

 
At 5/12/2011 11:43 AM, Blogger Paul said...

Benji,

"Two years into Obama, and the DJIA is back above 1999 levels; we are nearly out of Iraq and Afghanie maybe soon; bin Laden is dead; and our financial system has largely been repaired. Obama is stilled dressed in civvies."

I loved your rather incomplete analysis. Your boyfriend's wrecking ball policies have resulted in sky high unemployment, unimaginable debt, and $4 gas even as he demonizes the oil companies and implements policies that will only drive the price higher. The worst President in history is sitting in the Oval Office right now, and you're one of the morons who put him there.

 
At 5/12/2011 12:22 PM, Blogger Rufus II said...

Juandos, I have ancestors that came over on the Dove. I have other ancestors that came over about 10,000 years ago, as best we can tell.

I fought in Vietnam, and my Uncle, and namesake, was killed in WWII. My family has lost people in just about every war the U.S. has ever fought, including the Revolutionary War. Don't tell ME to go to Sweden.

I've worked, and paid taxes (a hell of a lot more than 15%) every since I got left college (I went on the GI Bill.) I Vote in every election (usually Republican.)

I think I have a right to an opinion.


And, NO, you Cannot run this country on 16% of GDP. You can run "Mexico" on 16% of GDP.

We have a spending problem, no doubt. We, ALSO, have a Revenue Problem. The Middle Income, and the Upper Income are either going to pay more, or our country, as we know it, is finished.

And, I didn't say Clinton "balanced" the budget, or even "almost balanced" the budget. I said he had us in "Pretty Good Shape." And, he did.

You can cry, and moan, and stamp your cute little footsies all you want, we have to raise more revenue. It's as simple as that. We can cut spending a couple of hundred Billion, but We're $1.6 Trillion in Deficit.

One point Six Trillion Dollar Deficits will, fairly quickly, put this country in the equivalent of Debtors' Prison. It's time to get serious.

 
At 5/12/2011 1:16 PM, Blogger juandos said...

Oh dear! Poor galop47 is all in a dither...

"And, NO, you Cannot run this country on 16% of GDP. You can run "Mexico" on 16% of GDP"...

Really? Wouldn't 16% of our GDP be more than enough if so many extorted tax dollars weren't wasted on socialist programs, programs that can't be found in the Constitution?

"I said he had us in "Pretty Good Shape"...

Well sir, you'd still be wrong...

Apparently checking out the links in the article I posted to you weren't that important, eh?

"You can cry, and moan, and stamp your cute little footsies all you want, we have to raise more revenue"...

So you don't have any idea of what percentage of of extorted tax dollars are wasted on constitutionally questionable social programs, eh?

 
At 5/12/2011 1:29 PM, Blogger Benjamin said...

On a serious note, I can't take this chart seriously. Publishing periodicals is one of the most profitable industries? How is that possible?

 
At 5/12/2011 2:31 PM, Blogger juandos said...

"Publishing periodicals is one of the most profitable industries? How is that possible?"...

How don't know how old you are but compared to the number of magazines on the racks back in the Sixties & Seventies versus now there 'seems' many times more choices...

Compared to the oil industry for instance I'm sure the cost of producing a magazine is much cheaper (not to be confused with cheap) than producing a barrel of oil...

Mind you I'm just guessing...

 
At 5/12/2011 2:56 PM, Blogger Rufus II said...

Juandos, I don't believe there is anything in the Constitution about spending $200 Billion/Yr in the Persian Gulf to make it safe for Exxon oil supplies,

OR $150 Billion/Yr to make Afghanistan "safe for democracy," but Bushco signed us up for it.

 
At 5/12/2011 3:07 PM, Blogger Benjamin said...

Juanditos-

Most publishers are getting whacked--combo of lower revenues and readership, yet higher paper and fuel bills.

 
At 5/13/2011 5:27 PM, Blogger Orlin said...

Shouldn’t “Big University” be in there somewhere?

 
At 5/13/2011 7:00 PM, Blogger bob wright said...

This attack on the oil industry by the Obama administration would make Stalin proud.

Combined with the attack on the personal property of Boeing by the NLRB, this administration betrays its collectivist intentions.

If you're going to carry union water, you should at least have the courage to admit it publicly, instead of just behind closed doors.

I don't care what your philosophy is; just don't piss on me and tell me it's raining.

 
At 5/14/2011 9:09 AM, Blogger VangelV said...

Facts do not matter to the populists looking for someone to blame for the bad times. Theirs is a political, not a logical, position.

 

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