Nation/World


Fortune 500 Profits Jump 23% Nation’s Top Companies Saw Huge Gains In 1996

TUESDAY, APRIL 8, 1997

The annual listing of supernovas among American corporations was unveiled Monday when Forbes and Fortune, the two prominent financial magazines, released their listings of the top 500 companies across the nation.

The highlight: In an age of rousing prosperity, the nation’s most successful companies enjoyed a 23 percent jump in profits last year, according to Fortune magazine.

The low light: Employee income gains were paltry compared with corporate profits.

And just in case you’re wondering about what it takes to get on the lists, the answer, this year, is about $2.5 billion in your paycheck before taxes.

On those things and most other rankings, the magazines agree. But there were some slight differences, probably important only at the margins.

At the bottom of Forbes’ list is Medtronic, which had sales of nearly $2.4 billion last year, a 14 percent jump from 1995. But Medtronic, a Minneapolis company that makes pacemakers and heart valves, does not make the Fortune list.

Number 500 on the Fortune list, in terms of revenues, is Vencor Inc., a company in Louisville, Ky. that provides hospital and nursing home care for chronically ill patients. Vencor had $2.578 billion in sales.

The top of the list is slightly more predictable: It makes clear that it still pays very well to make cars, drill for oil or own a gazillion discount department stores across the country.

Now in its 42nd year, the Fortune 500 ranks the top U.S. companies by sales. But it also measures their performance in other important ways, such as profits and stock market value.

The intense competition of the marketplace has reached the publishing of thelists as well: Forbes, which has been publishing its lesser-known list for 29 years, released its list on the same day.

The long-running rivalry between Exxon and General Motors for the top spot continued as well, with both companies getting a chance to say they are the biggest.

General Motors took in more money, but Exxon made more profit.

GM, with $168 billion in sales, was the largest revenue producer. Exxon, with $7.5 billion in profits, made more money than any other company. GM racked up about $5 billion in profits, more than twice the national budget of Costa Rica, while Exxon had revenues of $116 billion, which is about what it cost the U.S. government to run the entire country in 1965.

Exxon’s $7.5 billion profit is about half the proposed $17 billion budget under debate by the Pennsylvania General Assembly, and 2,500 times the $3 million in questionable suspicious contributions that the Democratic National Committee has pledged to return to donors.

And that comes even though the large Texas petroleum company is still paying off the $900 million it pledged to clean up Prince William Sound off the Alaskan coast after its tanker, the Exxon Valdez, ran aground and spilled more than 10 million gallons of crude oil in March 1989.

That $900 million in clean-up costs, pledged over a 10-year period, is about one-tenth of 1 percent of the company’s 1996 profit.

And as the vexing debate over campaign finance rages on, it is noteworthy, that in 1995 and 1996, the Democratic and Republican parties raised a total of $688 million to finance campaigns, which is about equal to the profits of Campbell Soup just in 1996. Campbell ranked 118th on the Forbes profit list, and the bad news was that profits were down more than 7 percent from the previous year.

As could have been predicted from last year’s stable inflation rate, the growth in company profits far outpaced employee income gains.

“The companies of the Fortune 500 have restructured, re-engineered, refinanced, downsized, laid off, split up and merged their way to prosperity,” the magazine said in the April 28 issue, on newsstands next week.

Questioning how long the good times can last, Fortune wrote: “Don’t businesses need to start selling more jet engines, more hamburgers, more software programs, and more telephone calls - to keep this earnings express rolling?”

In total, the companies earned nearly $300 billion in profits last year, more than twice the U.S. trade deficit.


 
Tags: economy

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