October 30, 2008 6:05AM

Exxon Profits and Taxes

By Ray Hennessey

Two things to think about when ExxonMobil reports today. First, wouldn't it be nice to see the largest company by market cap actually meet or exceed estimates for once? For all the criticism that its profits are TOO big, it seems that Exxon always falls shorts of what Wall Street thinks it potentially could earn. Not sure if that's a corporate strategy on its part, since there's no political upside in squeezing more profit out of its results, but Exxon is always a study in a company that has a lot of potential to improve its margins. We'll see if that's the case here.

Also, look at its effective tax rate. Most media and politicians will focus on the huge quarterly profits XOM reports, but few will mention that $9-$10 billion in taxes it puts into the government's coffers every quarter. That's important revenue for the government, and a rare instance where a company is sending cash to Washington instead of waiting for the government to write it a check.