Buoyed by rising profits from lofty oil prices, Exxon Mobil Corp. passed General Electric Co. Friday to become the largest U.S. corporation by stock market value.
The two Goliaths traded places after Exxon Mobil shares gained more than 2 percent — having surged 43 percent from a year ago — while GE’s stock slipped.
That vaulted Exxon Mobil ahead of GE in market capitalization, topping $383 billion compared with about $379 billion for GE.
A spokesman for Exxon Mobil, which just set a record for quarterly operating profits by a U.S. corporation, said the Irving, Texas-based company wasn’t counting.
“We kinda leave that to other folks,” said Tom Cirigliano. “Our goal is to be the most efficient and profitable company. If the outcome of that is that we become the largest company, that’s just icing on the cake.”
Exxon Mobil was already far ahead of GE in sales and profits.
(MSNBC is a joint venture of Microsoft and NBC, which is a GE company.)
David Frail, a spokesman for GE, a conglomerate with industrial, financial and media holdings including the NBC television network, said the company preferred to focus on returning to double-digit growth in earnings.
“We’re focusing on growing our earnings and growing our market cap, in that order,” Frail said. “We’re not as concerned with rankings as we are with growing the businesses we’ve got.”
Mark Baxter, director of an energy institute at Southern Methodist University in Dallas, said the long run-up in Exxon Mobil stock reflected investor confidence in the company’s management and a desire to cash in on rising oil and gas prices.
“It came their way, but you still have to manage the company,” Baxter said. “They’ve always done that well.”
Baxter said that for Exxon Mobil, the honor of being No. 1 carried risks. He said the company wished to avoid the limelight because of the public’s negative perception of big oil.
Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton business school, said, “Frankly, I don’t think this move in the market says much of anything about the management of either company.”
In trading Friday on the New York Stock Exchange, Exxon Mobil shares rose $1.28, to close at $59.41, while GE shares fell 15 cents, to finish at $35.88. That was enough of a swing to put Exxon Mobil ahead in market capitalization — price multiplied by the number of outstanding shares. GE shares have gained 9 percent in the past year.
Last month, Exxon Mobil announced it earned $25.3 billion in 2004, believed to be a record for U.S. companies after excluding windfalls from selling assets. Revenues were $298 billion, topping the previous leader, Wal-Mart Stores Inc., at $288 billion.
Profits at Fairfield, Conn.-based GE have grown more slowly in the last few years, hitting $16.6 billion on sales of $152 billion last year.
Both companies have long been near the top in market value. According to researchers at Standard & Poor’s, GE passed Exxon Mobil to become No. 1 in 1993 with a value of $89 billion — less than a fourth its current worth.
GE lost the top spot in 1998 to Microsoft Corp., which briefly topped $600 billion in market cap during the technology boom until its shares skidded in 2000.
The two Goliaths maintained a comfortable lead in stock market value over the next three largest U.S. companies by market cap, Microsoft, Citigroup Inc., and Wal-Mart.
Exxon Mobil gave another indication Friday that it could stay among the leaders for a long time. It reported that for the 11th straight year it added enough new energy reserves to fully replace all the oil and natural gas it produced in 2004.
The company has proved reserves of 22.2 billion barrels, enough oil and gas to last 14 years at current production rates.