Wal-Mart Stores Inc. regained the number one position on the Fortune 500 list this year after being demoted to number two by Exxon Mobil Corp. in the previous year’s list. A strong economy led American companies to the most profitable year in the history of the Fortune 500, a 53 year span. The 2007 rankings of the Fortune 500 are based on the revenues of 2006 where Wal-Mart was once again the King of retail. Wal-Mart showed an 11 percent increase in revenue, up to $351.1 billion and showing profits of $11.3 billion. The number one spot on the Fortune 500 has become home for Wal-Mart, topping the list five out of the last six years. Despite some public relations issues, Wal-Mart has improved its overall image to the public and now employs 1.9 million people around the word.
The one company to challenge Wal-Mart for this coveted number one spot is Exxon Mobil who came in at number two on the 2007 Fortune 500 list. Exxon Mobile had $347.3 billion in revenue and profits reaching a record high by a United States company at $39.5 billion. The Fortune 500 list had a record breaking year itself showing combined profits of $785 billion. This new record breaks the previous record set at $444 in 2000 when the technology industry peaked.
Oil and automotive companies dominated the top 10 on the Fortune 500 list claiming 5 of the 10 spots, companies including Exxon Mobile Corp., General Motors, Chevron Corp, Conoco Phillips and Ford Motors, the only company in the top 50 to actually show a decrease in sales. The rest of the top 10 are assorted companies such as General Electric at number 6, Citigroup Inc at number 8, Bank of America at number 9 and American International Group last at number 10. Google was one of the biggest movers and bumped up more than 100 spots on the list to number 241 but the overall Internet sector which Google falls under dropped from first to 48th.
Berkshire Hathaway jumped up one spot despite the news that Investor legend, Warren Buffet is looking for a successor to replace him as the chief investment officer for their $50 billion portfolio. This announcement came through a letter to shareholders. HP dropped 3 spots to number 14 after some scandals involving executive management spying. Income did grow an amazing 159% and HP also had the accomplishment of passing up Dell as the largest PC manufacturer in the United States.
Home Depot is beginning to feel the effects of a slow housing market as profits dropped one percent last year. CEO Bob Nardelli left Home Depot in January with a large payout and was replaced by Frank Blake. Revenues did rise over 10% last year despite the small drop in profits. Consumer giant Proctor & Gamble got knocked back one spot despite some price increases and the introduction of some new products.
Target opened many new stores in 2006 and saw a growth in same store sales which actually beat Wal-Mart. Revenues for Target went up 13% over the previous year. Dell dropped 9 spots and had a tough year overall with a 27% decrease in profits. The founder of Dell, Michael Dell took the company back under his control in January from Kevin Rollins.
Another big riser on the list was Sears Holding. Run by Eddie Lampert, a former money manager who promised share holders to show discipline by not opening any new stores, which has been common by competitors Target and Wal-Mart. Profits soared 74% this year after a costly merger with Kmart.
The new Xbox 360 video gaming may have saved Microsoft from dropping out of the Top 50 this year. The long delay of the Windows Vista operating system didn’t help Microsoft who came in at number 49 on the Fortune 500.
The highest climbers in the Fortune 500 over the last 10 years include Washington Mutual, Constellation Entergy, General Dynamics, Centex, Omnicom Group, Valero Energy, Comcast and Cisco Systems. These companies have all climbed 250 places or more up the Fortune 500 since 1997. Valero Energy is the only Top 50 Company coming in at number 16.
