Quote Originally Posted by God
ok this stuff is annoying.

the profit margins were nearly the same.
there is a difference between PROFIT
and PROFIT MARGIN

for example.

say your company makes 1 million dollars a year.
now you subtract your operating costs which are 930,000
you made 70 000$ profit

now
to find the profit margin
divide the 70 000 by 1 000 000
you get
0.07
=
7%

now say the next year, you make 2 000 000
and you have double the operating costs of last year,
930 000 x 2 = 1 860 000
so subtract that from the revenues, you get
140 000

DOUBLE THE PROFITS! right? yes, but.
what is the profit margin you ask?

divide 140 000 by the revenues, 2 000 000

its still 0.07

while you can hype up everyone by saying profits were XXXXXXX
or in this case PROFITS DOUBLED!

they are the same percentage of last year.

So whats todays lesson?

Don't beleive the media hype.
Im not picking a fight. I would like to know how it is possible for Exxon to have no change in thier profit margin. Exxon's production is down almost 5% and they have an increase of 75% in profit and 32% in revenue.

http://www.bloomberg.com/apps/news?p...7TS_s&refer=us
Profit margins on refined fuels widened as gasoline and diesel prices rose even more than the cost of crude oil.

``Profits continue to rise because of prices,'' Douglas Ober, who manages $2 billion, including Exxon Mobil shares, at Adams Express Co. in Baltimore, said today in an interview. ``We should continue to see high prices because so much production in the Gulf of Mexico is still shut in because of the hurricanes and a number of refineries are still closed.



http://money.cnn.com/2005/10/27/news....reut/?cnn=yes

While Exxon's quarterly profit was up 75 percent from a year earlier, and revenue rose 32 percent to more than $100 billion, the results fell short of Wall Street forecasts due to production outages caused by the hurricanes and sharply lower profit at the company's chemicals division.

Exxon's oil and gas production fell 4.7 percent in the third quarter from a year earlier as outages caused by Katrina and Rita, maintenance activities, and maturing fields more than offset higher production from new fields in West Africa.