Q2 Record Profits Driven by Corporate Profiteering in Oil, Transportation Industries
September 30, 2022 Groundwork Collaborative
Yesterday’s corporate profit data from the Bureau of Economic Analysis shows that even as families struggle to keep up with high prices, some industries are generating sky-high profits – since last quarter, oil and coal industry profits have increased 340% and motor vehicle and warehousing/transportation industry profits have increased nearly 40%.
Dr. Rakeen Mabud, chief economist and managing director of policy and research at Groundwork Collaborative, reacted with the following statement:
“We’ve heard directly from executives in the sectors that families depend on – from oil, to auto shops, to airlines – that inflation has been good for business. The latest corporate profit data shows their price strategies are bearing fruit.
“Policymakers must address corporate profiteering as a driver of inflation by reining in megacorporations and addressing the unsustainably high prices facing families around the country.”
Email email@example.com to speak to Dr. Rakeen Mabud about recent corporate profit data and what it tells us about inflation. And visit endcorporateprofiteering.org to find all of Groundwork’s latest corporate earnings call research.
WHAT EXECUTIVES HAVE BEEN SAYING ABOUT THEIR RECORD PROFITS:
- Chevron made $11.6 billion in Q2, up from around $6 billion last quarter, and up from 247% a year ago. Their CEO touted it as one of the strongest in more than a decade, stating, “We delivered another strong quarter…the highest since 2008.” Chevron emphasized it was “focused on generating returns” instead of production, as their production actually decreased despite banking monster profits. [7/29/22]
- Driven Brands, which runs auto shops and car repair services across the country, boasted that their essential services made it easier to take advantage of inflation: “We offer non-discretionary needs-based services. This means even as prices rise, consumers continue to get their vehicles repaired, maintained, washed and they’re all changed, and it will be very low on the list of services that are downsized when spending is squeezed.” [4/27/22]
- Four major U.S. airlines, Delta, United, American, and Southwest, each bragged about how they are constraining capacity on flights to drive up prices and pull in more profits. As Delta’s CFO told analysts, the company’s financial performance was ahead of expectations, with the “primary drivers are slower capacity restoration…” [7/13/22]
- Prologis, a global commercial real estate firm, has benefitted from the war in Ukraine, with their CEO saying, “Europe is as good as I remember Europe being… the neighboring countries have actually increased demand and led to actually better market dynamics for unfortunate and tragic reasons but it simply has.” Prologis’ CEO also boasted how the company is able to tell customers to “take a hike” if they ask for a discount because of market conditions, as they eventually come back and end up paying more. [7/18/22]