Petroleum Company Success

xom-l.gif 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.

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