Big Oil's Earnings Are Lousyhttp://www.fool.com/investing/general/2011/11/01/big-oils-earnings-are-lousy.aspx Isac Simon
November 1, 2011
This year has brought a fantastic ride for Big Oil. Thanks to the various geopolitical disturbances in oil -producing countries around the globe, crude oil prices have been on the higher end of the spectrum for a major part of the year.
The curtains are down on yet another round of earnings for these behemoths, and it should be no surprise that they rang up fantastic profits. The market, in turn, is duly ratcheting up their share prices. The net result: Mostly everyone seems satisfied, from top management to the retail investor.
Well, almost everyone. The bottom lines definitely look better, but the underlying fundamentals aren't as good as you might think.
But how long does management expect to survive solely on that fact? For several months, maybe, but what then? What about next year? Will these companies be able to project a similar growth pattern? Not unless they can increase production -- at the same time hoping that current crude oil prices remain stable.
Numbers don't lie
Sources: Google Finance, company filings, and author's calculations.