MAY 1982 - VOLUME 3 - NUMBER 5
U.S. Corporations - The Biggest and Most Profitable for 1981
Major U.S. corporations achieved an average gain in profitability in 1981 of 8% on a sales gain of 12%, Business Week reported last month. The 1,200 companies included in the magazine's report averaged a 4.5% profit margin in 1981, down from 4.9% reported in 1980. While profits grew on average, however, most of this growth was limited to a few industries, particularly utilities and industries involved in oil exploration.
The Business Week annual "Corporate Scoreboard" is based on figures provided by Standard & Poor's study of industrial corporations whose fourth-quarter sales exceeded $40 million, retailers whose sales were $60 million or better, the top 50 banks ranked by assets, electrical utilities reporting fourth-quarter sales of at least $300 million, and natural gas utilities with sales of over $100 million for the quarter.
Oil companies dominate the lists of corporations ranked both by sales and earnings, accounting for eight of the top ten profit makers behind profit-leader American Telephone and Telegraph. And oil service and supply companies were among the most-improved industries in profitablity, along with rubber and tires, steel and the food retailing chains. The year's big losers in earnings were metals and mining (down 43% for the year), real estate and housing, airlines, automotive (whose losses were reduced from $4 billion in 1980 to $1.2 billion last year), and the savings and loans industry.
Business Week commented that reported profit figures "may have been improved" by a new accounting rule, Financial Standard No. 52, which allows losses in foreign subsidiaries to be listed "below the line", under shareholders.' equity, which means they are not translated into U.S. losses. The strength of the U.S. dollar has meant a reduction in translation earnings from foreign subsidiaries.
All of these figures are for U.S.-based corporations, although many of them have various degrees of foreign ownership (such as Phibro which is 27.2% owned by the South African Anglo-American group), and not all companies included are multinationals. AT&T, for example, generates only a small percentage of sales and earnings outside of the U.S.A., and thus is not listed in the Monitor's listing of major multinationals