It's America's largest integrated oil company, and No. 2 in the world -- topped only by Royal Dutch/Shell Group and followed by ChevronTexaco
But back to the court battle. ExxonMobil was accused of cheating Alabama out of natural gas royalties by deducting too much from its expenses, thus leaving smaller profits. The state sought a judgment of $9.3 billion (yes, billion) and got. $11.8 billion. If that sounds like a lot, it sure is. The oil company's total net income in fiscal 2002 was $11.5 billion. Its cash hoard as of 2003's second quarter was $12.5 billion. So yes, it can pay the money -- but it will surely feel a pinch. (Interestingly enough, three of the nation's six largest judgments against companies have been against ExxonMobil, including $5 billion for the Exxon Valdez disaster.)
Of course, extreme verdicts (and even many ordinary ones) get appealed and are often reduced. The company is calling the judgment "unjustified and excessive," defying common sense. Its top lawyer, Sam Franklin, noted that, "The company did not engage in fraud, no evidence of fraud was established at trial, and fraud should never have been considered by the jury ... In addition to being unjustified, the $11.8 billion punitive award is excessive -- more than 180 times the $63,500,000 compensatory damages."
The stock market doesn't appear to be taking the judgment too seriously, as shares of ExxonMobil didn't exactly plummet on the day of the verdict. They ended the day down less than 1%, in fact. On our ExxonMobil discussion board, lawyer andyz151 opined that it doesn't seem right for the jury to be made up of the people who stand to benefit from a large judgment. (Take advantage of our free trial to see what others are saying.)
Read more about ExxonMobil's recent earnings results and its attractive dividend in this Fool article by W.D. Crotty.
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