Posted on 04/01/2002 8:22:19 AM PST by xp38
New York — Wal-Mart Stores Inc., the discounter that has become the dominant force in American retailing, is now the largest company in the U.S. and the world, capturing the top spot on the annual Fortune 500 list.
Wal-Mart, No. 2 on the list a year ago, traded places with oil giant Exxon Mobil Corp. in the rankings compiled on the basis of companies' annual revenue figures. The retailer's ascendancy was expected after both companies issued their 2001 results earlier this year.
The list of America's 500 biggest companies, published in the issue of Fortune magazine that reaches newsstands Monday, has some surprises, most notably bankrupt Enron Corp. moving up two notches to No. 5 despite its downward spiral.
Fortune itself questioned why Enron stayed on the list, but noted that the company benefited from the fact that, like other energy traders, it was allowed to include trading contracts in its revenues. Other energy trading firms also advanced in the rankings.
Wal-Mart became the first service company to lead the 500, which until 1995 was restricted to manufacturing concerns.
Since its founding 40 years ago, the Bentonville, Ark.-based company, which sells everything from fishing tackle to personal computers, has seen its annual revenues and sales surge, going from $1-billion (U.S.) in sales for all of 1979 to sometimes making that much in a single day last year.
Wal-Mart had $219.81-billion in revenues, compared to Exxon Mobil's $191.58-billion. The only other retailer in the top 20 was Home Depot Inc., which rose to No. 20 from 23, with revenues of $53.55-billion.
Wal-Mart remained the company with most employees on the list, with more than 1.2 million worldwide.
The list of the largest publicly held companies has been compiled annually since 1955 by the editors of Fortune.
Carol Loomis, a member of Fortune's board of editors, said Enron made the list because the magazine used Enron's restated earnings from Jan. 1 to Sept. 30, which gave it revenues of $139-billion. Despite filing for bankruptcy Dec. 2, the company wasn't ineligible for consideration.
"And that figure is what makes it fifth on our list," she said.
The magazine also took into account the fact that energy companies are permitted to list the gross value of energy trading contracts as revenues.
Energy companies generally benefited from increased revenue because of dwindling supplies, continued utility deregulation and a continued effort by OPEC to keep oil prices higher. Exxon Mobil lost ground in part because its fourth-quarter revenue was hurt by a drop in demand due to the recession.
Mergers again lifted some companies, including AOL Time Warner Inc., which jumped to 37th place from 271 thanks to the combination of Time Warner and America Online. The company had $38.23-billion in revenues, making it the largest Internet and entertainment company on the list.
Continued woes in the telecommunications industry hurt several companies' rankings, including Verizon Communications Inc., which fell to No. 11 from 10th.
Computer companies were led by IBM, which fell to No. 9 from eighth place.
Microsoft Corp. rose to 72nd place from 79, and Cisco Systems Inc., which makes equipment for the Internet, advanced to No. 92 from 107, despite continued slowness in the dot-com market.
The top 10 also included Ford Motor Co. at No. 4, a position it held last year. General Electric Co. dropped one place to No. 6, while Citigroup Inc., the nation's largest financial services company, fell to No. 7 from No. 6.
Philip Morris rounded out the top 10 after moving up one spot from No. 11.
The highest ranked new company on the list is No. 52 Mirant Corp., an energy trader spun off by Southern Co. in April 2001.
Total profits for the 500 corporations fell 53 per cent compared to 2000's 8.4 per cent increase, to $206-billion. The magazine's editors said it was the largest drop in profits since the magazine started compiling the list.
Revenue grew by 3 per cent to a combined $7.4-trillion, compared to $7.2-trillion in 2000.
FORTUNE 500 RANKINGS
Each entry includes rank, name of company, headquarters, last year's rank and 2001 revenue in billions of dollars (U.S.).
1. Wal-Mart Stores, Bentonville, Ark., 2, $219.812
2. Exxon Mobil, Irving, Texas, 1, $191.581
3. General Motors, Detroit, 3, $177.260
4. Ford Motor, Dearborn, Mich., 4, $162.412
5. Enron, Houston, 7, $138.718
6. General Electric, Fairfield, Conn., 5, $125.913
7. Citigroup, New York, 6, $112.022
8. ChevronTexaco, San Francisco, 20, $99.699
9. International Business Machines, Armonk, N.Y., 8, $85.866
10. Philip Morris, New York, 11, $72.944
There are a lot of Wal-Mart bashers here but I think Wal-Mart has done a great thing for America. They completely revolutionized retailing and put out of business a lot of inefficient retailers (mostly mom-and-pops) that greatly benefited the consumer. I remember as a child being dragged around by my mother every Saturday morning to about a half-dozen or so of these "mom-and-pop" stores. It was nothing but aggravation. Half the things you wanted were out of stock and you had to come back another day. What they did have in stock, you paid an arm & a leg for (comparatively). People may complain about customer service these days but those mom-and-pop stores were terrible. The owner-operators were about the crankiest people on earth and everytime you walked into the store, you got the impression you were being an imposition upon them. As well, the owners of these mom-and-pops would typically staff their little stores with family members who, to put it mildly, were not the sharpest knives in the drawer. Apparently all the competent family members had moved on to bigger and better things.
Nowadays, you can jump into Wal-Mart for about a half-hour and get maybe 95% of your daily household needs at very reasonable prices. I am not "nostagic" for the good old days at all and I'm glad to see the mom-and-pops gone.
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