As a shareholder in ExxonMobil, you could probably guess that I’ve been pleased with their stock performance. Over the last year, the stock price has increased from $56/share to $84/share. I recently received my annual report and I decided to take a quick look at the financial details…
ExxonMobil breaks out their financial results into various sectors: Upstream (exploration, drilling, etc), Downstream (refining, fuels, etc). A quick summary of how the financial returns have changed for this petroleum company: In 2002, the Downstream sector had earnings of $1.3 billion and a return on capital of 5%. In 2006, with all of the throughput metrics about the same, the Downstream sector generated earnings of $8.4 billion and a return on capital of 36%.
Even with this financial success (driven primarily by the increase in unit price of petroleum-based products), ExxonMobil is probably near the top of its stock price curve.