Fortune 500 2010 Ranking Fortune Magazines

The companies in this year’s 500 list slashed costs so fast and so deeply especially labor that even in a feeble recovery, their earnings soared.

The long-awaited recovery is now under way, but it’s a slow, painful slog that’s short on trust and confidence and long on a drumbeat of numbers that mostly shift from dreadful to less depressing. Twenty-seven months after the recession began, unemployment is stuck at 9.7%. Housing starts are dragging near half-century lows. Consumers are finally spending again, but they’re still too fearful about their jobs and homes to crowd malls and auto lots with the buoyant abandon that heralds a full-rigged revival, the kind Americans are used to.

Amazingly, as consumers struggle, U.S. corporations are staging a nearly unprecedented comeback that’s largely escaping notice. The gargantuan, dispiriting job cuts that seem to dominate the news have also been the spur for an epic resurgence in profits. For 2009, the Fortune 500 lifted earnings 335%, to $391 billion, a $301 billion jump that’s the second largest in the list’s 56-year history, approaching the increase in the robust recovery of 2003. For last year the 500 raised their return on sales from less than 1% to 4%. That’s close to the list’s 4.7% historical average.

Hence, the 500’s profits virtually returned to normal after years of extremes — bubbles in 2006 and 2007, collapse in 2008 — despite a feeble overall recovery that’s far from normal. This year’s list — reminder: the Fortune 500 ranks U.S. companies by revenue — is packed with changes that reflect and spotlight the trends reshaping corporate America. The homebuilders that occupied 14 places in 2007 and three last year, including Centex and Pulte, have all disappeared, casualties of shrinking sales. No fewer than nine newcomers from recession-resistant health care joined in 2009, among them drugmakers Genzyme (sales: $4.5 billion) and Allergan ($4.5 billion).

The fall in commodity prices removed half-a-dozen energy production, oil refining, and pipeline companies, and bumped last year’s No. 1, Exxon Mobil ($285 billion), into second place, far behind the new leader, Wal-Mart ($408 billion). The collapse in car sales pushed General Motors ($105 billion) from sixth to 15th place, the first time in the list’s history that GM didn’t make the top 10.

The rebound comes chiefly from three sectors: financial services, consumer cyclicals — items ranging from toys to furniture — and health care. In 2009 banks, securities firms, and insurance companies lowered their combined losses from a staggering $213 billion to just $20 billion. Buoyed by a government bailout, AIG swung from a loss of $99 billion in 2008 — a Fortune 500 record — to a deficit of $11 billion last year. The combined losses at Fannie Mae and Freddie Mac shrank by $15 billion to a still-huge $94 billion, as write-downs continued on subprime mortgages. By contrast, the banks and brokers, including J.P. Morgan, Wells Fargo, and Goldman Sachs, rebounded from losses of $8.7 billion to $38 billion in profits. Write-downs on toxic securities receded, and investment-banking profits jumped, helping offset losses on credit cards and mortgages. J.P. Morgan Chase doubled earnings to $12 billion, thanks chiefly to big gains in fixed-income trading.

In consumer cyclicals, a category that could be labeled “things you’d like to buy but can put off,” companies suffered losses of $42 billion in 2008. Casino operators, electronics retailers, and auto-parts suppliers saw revenues fall faster than they could slash costs. That trend reversed in 2009. Wal-Mart managed to lift revenues, on top of a big increase in 2008, by attracting bargain-hungry customers from competitors with remodeled stores and inexpensive private-label goods, offering everything from frozen pizza to patio furniture in one stop. A single trip also meant less spending on gas. Result: Earnings surged 7.0% to $14.3 billion.

The 500’s most exceptional study in ingenuity may be Mattel, the world’s largest toymaker. In late 2008, Mattel foresaw that sales would plunge in 2009 and introduced a clench-jawed cost-cutting campaign called Global Cost Leadership. Mattel pared its professional workforce by 10%, or 1,000 employees; paid down debt to lower interest costs by $10 million; and reduced overhead by $132 million. Its revenues did drop by $487 million, or 8%. But costs fell much more, by a remarkable $669 million before tax. Mattel booked a net income increase of $149 million, or 39%.

The star of 2009 is undoubtedly health care. The sector’s earnings jumped to an all-time high of $92 billion, placing it second behind tech at $94 billion. Health-care earnings rose by $23 billion, or 33%.

The Fortune 500’s remarkable response is yet another chapter in the saga of a list that’s gone from boom to bust to almost normal, all in the space of three short years. Never has getting to “almost normal” been a bigger achievement.
From:www.fortune.com

Rank Company Revenues
($?millions)
Profits
($?millions)
1 Wal-Mart Stores 408,214.0 14,335.0
2 Exxon Mobil 284,650.0 19,280.0
3 Chevron 163,527.0 10,483.0
4 General Electric 156,779.0 11,025.0
5 Bank of America Corp. 150,450.0 6,276.0
6 ConocoPhillips 139,515.0 4,858.0
7 AT&T 123,018.0 12,535.0
8 Ford Motor 118,308.0 2,717.0
9 J.P. Morgan Chase & Co. 115,632.0 11,728.0
10 Hewlett-Packard 114,552.0 7,660.0
11 Berkshire Hathaway 112,493.0 8,055.0
12 Citigroup 108,785.0 -1,606.0
13 Verizon Communications 107,808.0 3,651.0
14 McKesson 106,632.0 823.0
15 General Motors 104,589.0 N.A.
16 American International Group 103,189.0 -10,949.0
17 Cardinal Health 99,612.9 1,151.6
18 CVS Caremark 98,729.0 3,696.0
19 Wells Fargo 98,636.0 12,275.0
20 International Business Machines 95,758.0 13,425.0
21 UnitedHealth Group 87,138.0 3,822.0
22 Procter & Gamble 79,697.0 13,436.0
23 Kroger 76,733.2 70.0
24 AmerisourceBergen 71,789.0 503.4
25 Costco Wholesale 71,422.0 1,086.0
26 Valero Energy 70,035.0 -1,982.0
27 Archer Daniels Midland 69,207.0 1,707.0
28 Boeing 68,281.0 1,312.0
29 Home Depot 66,176.0 2,661.0
30 Target 65,357.0 2,488.0
31 WellPoint 65,028.1 4,745.9
32 Walgreen 63,335.0 2,006.0
33 Johnson & Johnson 61,897.0 12,266.0
34 State Farm Insurance Cos. 61,479.6 766.7
35 Medco Health Solutions 59,804.2 1,280.3
36 Microsoft 58,437.0 14,569.0
37 United Technologies 52,920.0 3,829.0
38 Dell 52,902.0 1,433.0
39 Goldman Sachs Group 51,673.0 13,385.0
40 Pfizer 50,009.0 8,635.0
41 Marathon Oil 49,403.0 1,463.0
42 Lowe’s 47,220.0 1,783.0
43 United Parcel Service 45,297.0 2,152.0
44 Lockheed Martin 45,189.0 3,024.0
45 Best Buy 45,015.0 1,003.0
46 Dow Chemical 44,945.0 648.0
47 Supervalu 44,564.0 -2,855.0
48 Sears Holdings 44,043.0 235.0
49 International Assets Holding 43,604.4 27.6
50 PepsiCo 43,232.0 5,946.0
51 MetLife 41,098.0 -2,246.0
52 Safeway 40,850.7 -1,097.5
53 Kraft Foods 40,386.0 3,021.0
54 Freddie Mac 37,614.0 -21,553.0
55 Sysco 36,853.3 1,055.9
56 Apple 36,537.0 5,704.0
57 Walt Disney 36,149.0 3,307.0
58 Cisco Systems 36,117.0 6,134.0
59 Comcast 35,756.0 3,638.0
60 FedEx 35,497.0 98.0
61 Northrop Grumman 35,291.0 1,686.0
62 Intel 35,127.0 4,369.0
63 Aetna 34,764.1 1,276.5
64 New York Life Insurance 34,014.3 682.7
65 Prudential Financial 32,688.0 3,124.0
66 Caterpillar 32,396.0 895.0
67 Sprint Nextel 32,260.0 -2,436.0
68 Allstate 32,013.0 854.0
69 General Dynamics 31,981.0 2,394.0
70 Morgan Stanley 31,515.0 1,346.0
71 Liberty Mutual Insurance Group 31,094.0 1,023.0
72 Coca-Cola 30,990.0 6,824.0
73 Humana 30,960.4 1,039.7
74 Honeywell International 30,908.0 2,153.0
75 Abbott Laboratories 30,764.7 5,745.8
76 News Corp. 30,423.0 -3,378.0
77 HCA 30,052.0 1,054.0
78 Sunoco 29,630.0 -329.0
79 Hess 29,569.0 740.0
80 Ingram Micro 29,515.4 202.1
81 Fannie Mae 29,065.0 -71,969.0
82 Time Warner 28,842.0 2,468.0
83 Johnson Controls 28,497.0 -338.0
84 Delta Air Lines 28,063.0 -1,237.0
85 Merck 27,428.3 12,901.3
86 DuPont 27,328.0 1,755.0
87 Tyson Foods 27,165.0 -537.0
88 American Express 26,730.0 2,130.0
89 Rite Aid 26,289.5 -2,915.4
90 TIAA-CREF 26,278.0 -459.1
91 CHS 25,729.9 381.4
92 Enterprise GP Holdings 25,510.9 204.1
93 Massachusetts Mutual Life Insurance 25,423.6 -115.1
94 Philip Morris International 25,035.0 6,342.0
95 Raytheon 24,881.0 1,935.0
96 Express Scripts 24,748.9 827.6
97 Hartford Financial Services 24,701.0 -887.0
98 Travelers Cos. 24,680.0 3,622.0
99 Publix Super Markets 24,515.0 1,161.4
100 Amazon.com 24,509.0 902.0

Tags: , , , , , , , ,

Leave a Reply