Exxon's whopper earnings
But while drivers may think the No. 1 oil company is exploiting their pain, Wall Street is actually a little disappointed.
By Steve Hargreaves, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - A whopping $8.4 billion? Or only $8.4 billion?

Exxon Mobil's first-quarter profit was nearly a billion dollars more than the same quarter a year earlier. Not as much as Wall Street wanted, but still an awful lot of money - especially to people paying $3 a gallon or more to fill their gas tanks. They're wondering why oil companies don't feel their pain.

Whether or not it's any consolation, feeling a little pain Wednesday were Exxon Mobil (Research) shareholders, who saw their stock fall as much as 3.3 percent in morning trading because the $1.37 income per share on revenue of nearly $89 billion was a dime below analysts' forecasts.

Although it missed estimates, Exxon's earnings were no small number. The $8.4 billion first quarter profit means the company made $1,080 a second. That per-second profit is enough to pay for gas for the average American vehicle to be driven 7,750 miles at current gasoline prices, or from Seattle to Miami and back again.

Fadel Gheit, an energy analyst at Oppenheimer, attributed the fall in profit from the $10.7 billion - a record for any U.S. company - posted in the fourth quarter of 2005 to higher production costs, higher taxes and royalties, and a 41 percent boost in capital investment and exploration projects.

Gheit noted that the company is now producing at its highest level in five years.

"They have to go on the offensive to withstand this avalanche of criticism," he said.

The decline in quarter-to-quarter profit came despite a 14 percent increase in oil prices since the start of the year.

Exxon isn't the only one showing surging profits. ConocoPhillips (Research) reported a 13 percent jump in its earnings, and even stronger results are expected from Chevron (Research) when it reports Friday.

Record gas prices, and oil company profits, have sparked public outrage and talk of action by lawmakers in recent months.

There are currently bills moving through the Senate to either limit future oil company mergers or skim off some of their earnings in a "windfall profits" tax.

The oil industry has responded by saying they need to remain consolidated in order to compete in a global energy market with foreign nationalized oil companies, many of which are bigger than Exxon Mobil, which has run its own ads in newspapers defending its profits.

The companies also say they're invested heavily in new energy technologies.

But they've also returned lots of the profits to shareholders.

Exxon returned $7 billion to shareholders in the form of dividends and share buybacks in the first quarter of 2006, a 67 percent increase from the prior year.

The company said Wednesday that it would keep its dividend at 32 cents a share for a the second quarter, unchanged from the first quarter but up from 29 cents in the fourth quarter of 2005. The company has increased its dividend for 29 consecutive years.

In its earnings statement, the company said it spent $4.8 billion on capital investment and exploration projects this quarter.

"Obviously, they can see investment opportunities," said Gheit. He added that an increase in exploration, production and not posting yet another record profit certainly didn't hurt the company's image.

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ConocoPhillips boasts big profits. Click here

Big oil defends its big profits. Click here Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.