We continue to hear how the economy teeters on the brink of another dip. Millions are still unemployed; have no healthcare; are losing their homes; in other words, the decline of the American Dream continues.
There is a bright spot, however: corporate earnings, supposedly indicative of a robust economy, continue to meet, exceed and even bust all previous records! One such star in the cloud-filled sky, is Exxon-Mobil. Is anyone surprised? Of course not! Big oil continues to prosper, while the Middle Class and poor have no choice but to help fuel the record profits.
“ExxonMobil Profit Tops Estimates, Posts 3Q EPS of $2.13, on Revenue of $125.33 Billion.”
Ok, so what exactly does that mean? Let’s break it down, so we can understand what seems to be a typical ‘financialese’ statement. When Wall Street talks about EPS, they’re referring to ‘Earnings Per Share.’ Now, ‘Earnings’ is not the total revenue that a company takes in; it is the remaining PROFIT, left over after reducing its revenues by its expenses. According to Investopedia, ‘Earnings’ is defined as:
“The portion of a company’s profit allocated to each outstanding share of common stock. Earnings Per Share serves as an indicator of a company’s profitability.”
So, ExxonMobil not only met expectations, but exceeded even their own predictions of how much revenue and profit they would make this past quarter (July 1 – Sept 30). Yes…I said QUARTER! ExxonMobil had net profit of $2.13 per share on total revenue (sales + other income) of $125,330,000,000, between July 31 and September 30, 2011. Since ExxonMobil had approximately 4.9 Billion Common shares of stock outstanding at the end of the quarter, we just need to multiply the earnings per share ($2.13) by the number of outstanding shares (4.9 billion), to come up with the total profit figure:
$2.13 x 4,900,000,000 = $10,437,000,000
Not bad for one quarter! Now, I am a former business owner and I appreciate profit as much as the next person, however, there is ‘profit’ and then, there is ‘PROFIT!’ When reasonable ‘profit’ becomes unconscionable ‘PROFIT’, there is something wrong with the picture. Who am I to determine what is ‘reasonable’ and what is ‘unconscionable?’ I don’t think it takes a rocket scientist or even a Wall Street financial analyst to figure that one out.
It seems to me that reasonable profit approaches unconscionable profit when the profit-producing company is in a position that equates with a monopoly on the product or commodity being sold and purchased. Further, when the need for that product or commodity is a requirement for everyday living by a majority of the population. When these definitions are met, the product or commodity becomes a necessity, like electricity, water, food and shelter. People have no alternative but to purchase the product or commodity, whatever its price!
Is a profit of $10 Billion per quarter ‘reasonable’ or ‘unconscionable?’ I am going to step out on a limb here and proffer that it is ‘unconscionable.’ Crude oil prices are down from their highs, however, it doesn’t seem that lower crude oil costs equate to lower gas prices. If they don’t correspond, what can be a reasonable explanation? Another limb <*crack*> and my response is greed, pure and simple. While millions and millions are losing everything they’ve worked for over their lifetimes, mostly as a result of more greed from the financial industry, Big Oil continues to bring in profits exceeding their own estimates.
What’s the answer? Since gasoline has been, and continues to be, a requirement and necessity for the country, just as electricity and natural gas, we need to see the States step in to regulate the price. The States already have in place Public Utility Commissions that regulate the rates for electricity and natural gas, why not gasoline? Utilities like Pacific Gas & Electric, Dayton Power & Light, Duke Energy, Consolidated Edison, and others across the country, are all publicly traded companies, making reasonable profits and paying dividends. They have one thing in common: they are regulated by the States they serve.
Will we continue to allow the greed and unconscionable profits of Wall Street and big corporations to drain the wealth and security from the lives of the Middle Class and poor? Is this class warfare?
Is it jealousy of the big salaries and bonuses received by corporate execs and financial money-pushers? Is it unreasonable for the average US corporate executive to earn 400 times what the average worker earns? These are the questions being posed today by the Occupy Wall Street protesters…and millions of Americans like me & you. Where do you stand?