Earnings in Perspective
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Oil and natural gas companies are not immune to the global recession and the first quarter financial results underscore that. In recent years, much media and political attention has focused on rising oil and natural gas industry earnings, bolstered by record-high oil prices. But the oil and natural gas industry, like other commodity businesses, is highly cyclical.

Typically, oil and natural gas earnings are in line with the average of other major U.S. manufacturing industries. This fact is not well-understood, however, in part because reports usually focus on only half the story—the profits earned.

Though constantly targeted by politicians, oil and natural gas company earnings aren’t much higher than the Dow Jones Industrial Average, and are right in line with other manufacturing industries at around 7.6 percent. 

Like other industries, the oil and natural gas industry strives to maintain a healthy earnings capability. It does so to remain competitive and to benefit its millions of shareholders, across the country and in all walks of life. Healthy earnings also allow the industry to invest in innovative technologies that improve our environment and increase production to keep America going strong—even as it leads the search for newer technologies, and new sources of energy that will provide a more secure tomorrow.

API has assembled a primer that addresses these issues. View the full primer to learn more about industry earnings.

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