Economics & Research Blog
More Inflation News, and a Comment About "Obscene" Profits
The Producer Price Index came in today at +
By Dr. Joe Webb
Published: June 17, 2008
The Producer Price Index came in today at +7.2% more than last year.
In the UK, consumer prices rose +3.3%, and the Bank of England is afraid to raise rates because it may put a damper on growth. Like inflation's robbing value from people's paychecks doesn't?
WhatTheyThink ran Adobe's earnings press release: "As a percent of revenue, non-GAAP operating income in the second quarter of fiscal 2008 was 39.4 percent, compared to 37.8 percent in the second quarter of fiscal 2007 and 40.3 percent in the first quarter of fiscal 2008." People think oil companies make these kinds of profits. Nope, software is far more profitable than oil.
Exxon's net income as percentage of sales was 9.3%. Adobe's was 24.6%. Not that I'm defending Exxon: it's not their fault that government regulations have been rigged (pun intended) to protect large companies from new entrants of competitors. But to be in a supposedly greedy company controlled by big interests, shouldn't they have an Adobe-like bottom line? Last I looked, Exxon was in the bottom third of the Dow Jones 30 companies in terms of profitability. I'd be ticked off if I was a stockholder... and I'd try to lure John Warnock out of retirement to run the company :)