Wal-Mart rules again
Wal-Mart wins the battle for No. 1 for the second year in a row, knocking out its chief competitor for the title of America's largest company, Exxon Mobil.
The retail champ earned its place at the top with a staggering $421 billion in sales. And despite softness in the U.S. market and a nagging class action suit alleging sex discrimination that's currently before the U.S. Supreme Court, Wal-Mart's earnings jumped more than 14%, to $16.4 billion.
But while Wal-Mart has bragging rights, the real moneymaker is Exxon Mobil, no. 2 on the Fortune 500 this year. The oil giant rode soaring global oil prices to an astonishing $35.6 billion in profits — the most of any company on the list.
Fellow oil giant Chevron rounds out the top three with $196 billion in revenues, up 20%. More good news for Chevron: In March the company learned that it wouldn't have to pay billions in compensation to Ecuadorian citizens' groups who had sued Chevron's precursor company, Texaco, for environmental damage.
| Related Video Aaron Task talks with Dan Roth, Fortune.com managing editor, about America's Biggest Companies on Daily Ticker. |
Berkshire Hathaway jumped four places on our list, to No. 7. Revenues at the giant holding company rose by 20% to $136.2 billion. This should be some consolation to CEO Warren Buffett, who faced unaccustomed bad press recently after it emerged that heir apparent David Sokol had bought stock in a company that he then urged Berkshire to acquire. (Sokol has since resigned his post at Berkshire.)
There was also action farther down the list, as pharmaceutical stalwart Pfizer moved up nine places, to No. 31. Pfizer's earnings dropped 4.4%, though, and the company's board abruptly replaced CEO Jeff Kindler in December after five years of sluggish stock performance. With its patents for Lipitor and other blockbuster drugs about to expire, Pfizer needs to crank up its innovation engine.
DirecTV (No. 110) jumped six places on the list as revenues rose by almost 12%, to $24.1 billion. Driven by rapid growth in its Latin America division, the pay-TV provider's profits more than doubled. CEO Mike White announced that DirecTV added 1.9 million net new subscribers in 2010, its second-best year ever.
This year's list has a few oddities: Automaker General Motors rose to No. 8, despite having emerged from bankruptcy only in November. And two homebuilders made the list despite a national foreclosure crisis. Then there's that destitute ward of the government, Fannie Mae, which lost more than $14 billion last year but sprang to No. 5 on the 500, ahead of General Electric. Why? Mostly due to new accounting rules.
All told, the Fortune 500 generated nearly $10.8 trillion in total revenues last year, up 10.5%. Total profits soared 81%. But guess who didn't benefit much from this giant wave of cash? Millions of U.S. workers stuck mired in a stagnant job market.
Sure, these corporate profits derived partly from productivity gains, including workforce reductions. And many 500 companies are growing faster overseas than in the U.S. Nevertheless, we've rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans. -The Editors
Top 20 Companies
1. Wal-Mart Stores
 Photo: Wal-Mart Stores |
Revenues ($ millions): 421,849.0
CEO: Michael T. Duke
Wal-Mart rules the Fortune 500 for the second year in a row — and the eighth time this decade — beating Exxon Mobil decisively in the battle to be crowned America's largest company.
But things haven't been easy: Sales at its U.S. stores have dropped for seven straight quarters, despite gains in worldwide revenues and profits.
To fight back, CEO Michael Duke is restocking shelves with lower-priced products dropped by his predecessor, Lee Scott. He's also jumping on the anti-obesity bandwagon: Thousands of packaged food items are being reconfigured to cut their salt and sugar content.
2. Exxon Mobil
 Photo: Exxon Mobil |
Revenues ($ millions): 354,674.0
CEO: Rex W. Tillerson
The oil giant may not be the biggest company in the U.S., but it's by far the most profitable: Driven by higher prices for crude — as well as big gains in its natural gas and chemicals businesses — profits at Exxon Mobil topped $30 billion, a whopping 58% jump.
With its eye on growth, the company recently launched a massive joint venture in Qatar and an offshore well in eastern Russia. It also is making a big push into alternative energies, investing in biofuels and expanding operations designed to cut greenhouse gases.
3. Chevron
 Photo: Chevron |
Revenues ($ millions): 196,337.0
CEO: John S. Watson
Chevron's got some headaches to deal with: In Nigeria it faces ongoing hostilities from local thugs, and in Ecuador, it's fighting claims that its Texaco unit engaged in toxic-waste dumping.
So why not engage in a little retail therapy? In February, Chevron wrapped up its $3.2 billion acquisition of Pennsylvania's Atlas Energy, adding to its growing portfolio of natural gas operations. It also bought 200,000 acres of the Duvernay shale gas formation in Alberta, Canada. Expect the buying to continue: Chevron says it will boost capital spending 20% this year to $26 billion.
4. ConocoPhillips
 Photo: ConocoPhillips |
Revenues ($ millions): 184,966.0
CEO: James J. Mulva
Conoco stock has been on a tear this past year, rising more than 40%, although it's still off sharply from its 2008 high. What's cheering investors? CEO James Mulva's plan to shed assets — more than $15 billion worth in the past 18 months — and reduce long-term debt.
The company also plans to drill 150 new oil wells this year in its Eagle Ford project in southern Texas and anticipates hitting peak production of some 65,000 barrels per day in 2013. Mulva's expanding shale operations, too, having added about 90,000 acres in North America last year.
5. Fannie Mae
 Photo: John R. Coughlin |
Revenues ($ millions): 153,825.0
CEO: Michael J. Williams
Sure, it's still living off a lifeline from the federal government. But that hasn't stopped Fannie from leaping into the top 5 this year, up from no. 81. It's mostly new accounting rules, though, that have pushed Fannie so high on the 500.
Indeed, Fannie's troubles are far from over. In April, the SEC began investigating statements then-CEO Daniel Mudd made in 2007 to Congress that may have misrepresented Fannie's health. And FNMA stock has done so poorly that the New
6. General Electric
 Photo: General Electric |
Revenues ($ millions): 151,628.0
CEO: Jeffrey R. Immelt
Jeffrey Immelt's decade-long tenure as CEO has been one of "decline, mistakes, and wealth destruction," Fortune concluded recently. And the nuclear disaster in Japan, involving GE-designed reactors, hasn't helped the conglomerate's reputation.
| More at CNNMoney.com: See the complete list of America's Biggest Companies in 2011 |
But there's still cause for optimism. GE's order backlog for core industrial products like turbines and locomotive engines stands at $175 billion, and could grow if plans for a $53 billion high-speed rail project ever win Congressional approval.
Meanwhile, Immelt has been allocating some $20 billion of capital annually into energy-oriented businesses. No wonder shares have nearly tripled since the depths of the financial crisis.
7. Berkshire Hathaway
 Photo: John R. Coughlin |
Revenues ($ millions): 136,185.0
CEO: Warren E. Buffett
Just about every company in Warren Buffett's fold is firing on all cylinders and cash-flush Berkshire will likely make some big acquisitions in the future. But the Oracle of Omaha faces a few uncertainties ahead.
For one: It's still unclear if there will be an investigation into David Sokol, the former Buffett heir apparent who quit in March. His resignation followed revelations that Sokol bought shares of Lubrizol shortly before Berkshire's $9 billion bid for the company.
Also hazy: just how much exposure Berkshire's reinsurance operations have to the Fukushima nuclear disaster in Japan. Luckily, Buffett keeps $20 billion in Berkshire's sock drawer to cover such unforeseen emergencies.
8. General Motors
 Photo: General Motors |
Revenues ($ millions): 135,592.0
CEO: Daniel F. Akerson
Bailed out and buffed up, GM emerged from bankruptcy with a $20 billion public offering in November, the largest IPO in U.S. history. Early results look good: The automaker posted its first annual profit in six years.
Daniel Akerson, GM's fourth CEO since the government's $50 billion rescue three years ago, plans to focus on four major brands — Chevrolet, Cadillac, Buick, and GMC. The goal is to cut inventory, close plants and dealerships, and otherwise improve efficiency. One sign of success: Its latest model, the Chevy Volt plug-in hybrid, was named Motor Trend's Car of the Year.
9. Bank of America Corp.
 Photo: John R. Coughlin |
Revenues ($ millions): 134,194.0
CEO: Brian T. Moynihan
CEO Brian Moynihan may have hoped that predicting $45 billion to $50 billion in earnings down the road would mollify investors distressed at the bank's $5.8 billion in losses over the last two years.
But some critics think the embattled bank chief is being overly optimistic. After all, Bank of America still needs to resolve continuing issues from the mortgage mess and a number of embarrassing lawsuits over the bank's foreclosure practices. And shares are off 78% from their pre-meltdown high — no wonder the Fed recently nixed the bank's plans to restore a dividend program.
10. Ford Motor
 Photo: Ford Motor |
Revenues ($ millions): 128,954.0
CEO: Alan R. Mulally
Riding on strong sales of the Fiesta and a redesigned Taurus, Ford turned in its best annual profit since 1999 last year.
In the U.S., CEO Alan Mulally shuttered Ford's Mercury division, completed the sale of Volvo, divested its Mazda shares, and saw sales jump 17%.
Next up: a big boost to Lincoln — Ford's last premium brand — as seven new models are planned in the next four years. Outside the U.S., the automaker delivered robust sales in India, Russia, and Eastern Europe.
After trading as low as $1.43 a year ago, Ford shares are now around $15.
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