Is Congress going to hold hearings on this"?

[Brucelee]

When profits were increasing, Congress was incensed! Will they now be equally concerned as profits decline?

Just curious!




Exxon Revenue Hits Record,
But Shrinking Margins Hurt Profit
By KEVIN KINGSBURY
November 1, 2007 9:46 a.m.

Exxon Mobil Corp. posted a bigger-than-expected 10% drop in third-quarter net income on lower refining and chemical margins, as the company set a quarterly revenue record.

The results sent shares lower in premarket trading, falling to $90.54 from Wednesday's closing price of $91.99.

EXXON'S EARNINGS


Dollars in millions
Segment 3Q'07 3Q'06 Change
Exploration & Production $6,299 $6,493 -3%
Refining & Marketing $2,001 $2,738 -27%
Chemicals $1,202 $1,351 -11%
The world's largest publicly traded oil company reported net income of $9.41 billion, or $1.70 a share, compared with $10.49 billion, or $1.77 a share, a year earlier. The mean estimate of analysts surveyed by Thomson Financial was for earnings of $1.75 a share.

Revenue rose 2.8% to $102.34 billion, topping the prior record of $100.72 billion set two years ago. Capital spending climbed 7.5% to $5.44 billion.

Upstream earnings - the company's oil-and-gas production business - dropped 3% to $6.3 billion on a 2% drop in production on factors including divestments and its loss of its Venezuelan assets. Helping were higher oil prices. The benchmark West Texas Intermediate crude price averaged $75.25 a barrel during the quarter, compared with $70.50 a year earlier.

Those higher prices have been hurting oil companies' refining profits. At Exxon's downstream business, which buys crude oil and which converts it to products like gasoline, earnings fell 31% to $1.9 billion on slumping margins. Oil refiners have been warning of late of falling margins as the surging crude prices haven't been matching with increases by finished products such as gasoline.

Chemical earnings dropped 11% to $1.2 billion on lower margins. Volume was flat.

Exxon last month filed an arbitration request with the International Center for Settlement of Investment Disputes, a forum closely linked with the World Bank, regarding the company's compensation dispute with Venezuela over Exxon's loss of control at the Cerro Negro oil project.

PRICE PER SHARE, PRICE PER BARREL


Through Oct. 30
Venezuela took over Exxon's 42% interest in Cerro Negro in June after both sides failed to come an agreement over turnover terms. Venezuela has been increasingly nationalizing industries in recent years.

Exxon bought another 90 million of its shares in the third quarter, spending $7.8 billion of the cash its operations have been generating buckets of. That cut the company's shares outstanding by 1.5% during the quarter.

The company will hold a conference call at 11 a.m. EST.

Write to Kevin Kingsbury at kevin.kingsbury@dowjones.com

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