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Exxon Breaks Records and Ignites Passions

By Reggie Abaca, Published: October 30th, 2008 12:08 PM CDT

Exxon Mobil (XOM) today shattered a record it had itself created today, reported income Thursday that shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.

That is sure to ignite the raw passions of the political world.  Look for the presidential candidates to jump all over this.

Yet numbers contained within the company's recent financial report revealed production numbers that continue to fall, and shares slipped 3 percent in midday trading.

On average, analysts expected the company to earn $2.39 per share in the latest quarter on revenue of $131.4 billion.  Exxon said net income jumped nearly 58 percent to $2.86 a share in the July-September period. That compares with $9.41 billion, or $1.70 a share, a year ago.

Setting U.S. profit records has become commonplace for the oil giant.  But it has also created a negative persona for the company, which is looked to be deeply associated with the current unpopular American administration.

Things will likely change in one week.  Polls show Barack Obama comfortably ahead in the electoral college, by about 2 to 1.  Intrade, a prediction market based in Ireland, shows an 86% chance Obama will be the victor.

That has kept many oil industry investors anxious, knowing that the Democrats, speaking loudly about more government regulation, will soon have full control of the U.S. government.

In most cases, politics and the market are not this closely aligned.  But today they are more than ever.  The cloud of a Democratic governement and administration will be upon XOM shareholders soon, so it would be wise to be cautious.  Meanwhile, Exxon is loudly bragging about their record profit.  Somebody needs to tell them to be quiet.

Related: XOM

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