Word: oils
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Dates: during 1970-1979
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...numbers on oil industry balance sheets are always bogglingly big. In 1978, according to Data Resources Inc., the research firm headed by Democratic Economist Otto Eckstein, the revenues of U.S. domestic and international oil firms totaled a staggering $346 billion; the after-tax profits totaled $15.6 billion, which was more than three times the earnings of all U.S. auto manufacturers. Still, by any yardstick, oil company profits are not out of line with those in other U.S. industries...
...terms of profits as a percentage of revenues, the oil firms' average margin was 4.5% in 1978, according to Data Resources. While this was somewhat fatter than the automakers' margin (3.97%), it was below the average for U.S. industry (5.25%) and far under some truly high-profit businesses, such as soft drink companies (7.8%), cosmetics makers (8.11%) and drug firms...
...terms of return on invested capital, the oil firms have been slightly below the par for U.S. industry. In 1978, according to a Chase Manhattan Bank study of 27 oil companies, they had an average return of 13.2%, compared with nearly 15% for all firms...
...terms of earnings growth, oil companies have fared marginally better than industry as a whole. From 1977 to 1978, according to Data Resources, the earnings of all U.S. companies expanded by 15.9%, while those of domestic oil firms rose by 16.4%. For the international oil firms, however, the growth was much less, about 1%, as a result of the dollar's decline and price controls in foreign markets...
...speech, the President chided the oil companies for spending too much of their profits on buying "department stores and hotels" and in other nonenergy investments. Actually, the amount of such spending is not large: of the $29.4 billion invested in all areas in 1978 by the 27 firms in the Chase study, about $2.8 billion, or some 10%, was spent on nonenergy projects. The remainder, or nearly $27 billion, was plowed back into the energy business. About 63% of those funds, or some $17 billion, was devoted to oil exploration and the development of new wells; a bit more than...