Profits for Fortune 500 Firms Dip
.c The Associated Press
By DONNA MURPHY WESTON
NEW YORK (AP) -- Profits at the Fortune 500 companies declined for the first time in seven years in 1998 as U.S. companies suffered the effects of the economic crisis in Asia, Russia and Latin America.
Overall, profits for the 500 fell 1.8 percent last year, compared to 7.8 percent earnings growth in 1997, according to Fortune magazine's annual listing of the largest U.S. public companies, released Monday.
Revenue growth shrank to 4 percent from 8.7 percent in 1997 as U.S. companies found demand for their products and services stifled by the ongoing financial problems overseas.
While 1998 will not be remembered for its stellar profits, the magazine said, it will likely mark the beginning of the end of the dominance of blue chips such as General Motors and Coca-Cola. Younger companies such as Microsoft, Cisco Systems and Dell, with their surging revenues, are wielding more influence in corporate America, Fortune said.
Fortune said 1998 ''will probably be considered a watershed year, the year when the New Economy fundamentally parted ways with the old and high-tech consolidated its role as the driving force behind the growth of big business.''
GM remained No. 1 for the 11th straight year on the list, which ranks companies according to revenue. It was followed by Ford Motor, Wal-Mart, Exxon and General Electric.
Cisco, meanwhile, jumped 61 slots from No. 253 to 192, while Dell Computer shot up from No. 125 to 78.
Other high-tech companies that have become darlings of Wall Street recently, haven't made the list yet. While the stock prices of online auctioneer eBay, Internet service provider AtHome and online bookseller Amazon.com have given them market capitalizations surpassing many Fortune 500 firms, they have yet to generate significant revenues, let alone profits. The company that ranked No. 500, container maker Ball Corp., had nearly $2.9 billion in revenue.
Among the Internet group, America Online came closest to making the list, coming in at No. 535.
GM had $161.3 billion in revenue, followed by Ford with $144.4 billion, Wal-Mart with $139.2 billion, Exxon with $101.7 billion and General Electric with $100.5 billion.
IBM was sixth with $81.7 billion, followed by Citigroup with $76.4 billion, Philip Morris with $57.8 billion, Boeing with $56.1 billion and AT&T with $53.6 billion.
Chrysler, a perennial top-10 finisher, disappeared from the list as its merger with Daimler-Benz, made it a foreign company and therefore ineligible.
Several other megamergers shook up the rankings, with no less than 33 of the 47 new arrivals reaching the list by way of a merger, the magazine said.
Among the largest deals were the Citibank-Travelers Group combination that propelled Citigroup into the No. 7 slot from Citibank's 1997 rank of 21 and the merger with MCI that sent WorldCom from No. 210 to No. 80.
Forty-seven companies were bumped from the list. Two of the most notable were Reader's Digest, which fell from No. 490 to 529, and Borden, which slipped from 414 to 585.
The biggest employer among the 500 was Wal-Mart with 910,000 workers, followed by GM with 594,000. |
