Friday, March 06, 2009
ExxonMobil: Steady as she goes, with confidence
In 1985 I bought 50 shares of Exxon (now ExxonMobil) with summer job money, put it on dividend reinvestment, and have hedged my gasoline budget ever since. If you are young and can scrape together some small amount of extra coin, you might consider doing the same thing.
Of course, as recently as last summer ExxonMobil was everybody's favorite company to hate. Oil prices were high, XOM's profits were higher, and nobody was more loathesome than a company that refused to admit it was evil because of its carbon admissions (never mind all the companies that made a big show of superficial greeniness while going about their business pretty much the way they always had).
Today, ExxonMobil at least seems like the last American company that is continuing to expand. That's not actually true -- my company, for instance, is creating jobs this year, as it has every year for the last decade -- but Exxon's aggressiveness in the face of oil price deflation is inspiring and even a little bit comforting. Even the New York Times, in its coverage of Exxon's annual investor meeting, seems to sense that perhaps we should not be so quick to bash a great company that has been astonishingly successful in a simply brutal industry.
Wall Street is trading at its lowest level in more than a decade, some American automakers are on the verge of bankruptcy and the government is bailing out the nation’s biggest banks.
But in these troubled economic times, one big company is bucking the trend.
Exxon Mobil put on a show of strength on Thursday, pledging to increase investments in coming years, chiding rivals for mistimed acquisitions and reminding everyone it had the financial strength to make headway even as other companies pulled back.
“The question now becomes who can be successful in more challenging times,” Rex W. Tillerson, Exxon’s chairman and chief executive, said at the company’s annual investor presentation at the New York Stock Exchange.
Mr. Tillerson had a ready answer for his own question. Exxon, based in Irving, Tex., earned $45 billion in 2008, gave back $40 billion to its shareholders, invested $26 billion around the world, and managed to find more oil than it produced. It also outperformed all of its rivals, like Chevron and Royal Dutch Shell.
Undaunted by a collapse in oil prices and the most severe global financial crisis since the 1930s, Exxon said it would dial up its investments over the next five years. It plans to spend as much as $150 billion through 2014.
Its oil and gas production, which was stagnant recently, is expected to grow 2 to 3 percent a year in the next five years, thanks in part to the company’s big natural gas projects in the Middle East.
Since 2004, Exxon has distributed $146 billion to its shareholders, either through dividend payments or share buybacks, more than was given back by Royal Dutch Shell, BP and Chevron combined.
Good for ExxonMobil and its executive team. If the world is going to get out of this, we're going to need more leading companies to locate their inner animal.
1 Comments:
By 
Georg Felis, at
Fri Mar 06, 06:27:00 PM:
Nothing to do with a Tiger being Exxon's mascot, I suppose? :)
http://www.exxonmobil.com/Corporate/history/about_who_history_alt.aspx
