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Wal-Mart tops Fortune 500 list

Wal-Mart Sales Reported Up
With sales of almost $259 billion, Wal-Mart again topped the list of the nation’s largest publicly traded companies.Tim Boyle / Getty Images file
/ Source: The Associated Press

A tail wind of improving economic conditions blew many major companies to record revenues in 2003, but none was able to knock Wal-Mart Stores Inc. off the top of the Fortune 500 list.

With sales of almost $259 billion — more than a quarter of a trillion dollars — the late Sam Walton’s global chain of general stores topped the list of the nation’s largest publicly traded companies for the third straight year. There was some predictable shuffling among the rest of the top 10.

Fortune’s annual ranking, to be published in the magazine’s April 5 edition, is based on the companies’ sales figures as reported in financial statements for 2003.

Jittery geopolitics kept the price of oil high, helping Exxon Mobil Corp. to post $213 billion in revenue. The 17 percent jump leapfrogged the oil company past General Motors Corp. into the No. 2 spot.

In terms of profits, Exxon Mobil was first with $21.5 billion in earnings. Wal-Mart, which has the lower profit margins of the retailing industry, had $9.05 billion in earnings.

Carmakers GM and Ford Motor Co. came in third and fourth respectively, with revenues of $196 billion and $164 billion. General Electric Co., the provider of everything from jet engines to sit-coms, remained at No. 5 with revenue of $134 billion.

Both Ford and GE held their spots from 2002.

ChevronTexaco Corp. moved up a spot to No. 6, while another refiner, ConocoPhillips, jumped five spots to No. 7. Banking powerhouse Citigroup Inc. was eighth, followed by International Business Machines Corp. and insurer American International Group, Inc.

As a group, the 500 companies bounced back from two years of profit declines, posting combined earnings of almost $446 billion on sales totaling $7.5 trillion.

“Making the accomplishment even sweeter was the fact that few observers had expected it,” wrote Fortune’s Janice Revell.

Profits grew in 34 of the 39 industries that Fortune tracks. And only 37 of the 500 companies disappointed shareholders with negative returns, which the magazine calculated by adding the change in a company’s stock price to its dividend income.

Fortune credited barely-there interest rates, fewer accounting scandals, tax cuts and increased government spending as helping to power the blue chip boom. And although the war in Iraq kept oil prices high all year, the quick end to major fighting gave companies confidence, according to Fortune.

Among the 11 debutantes on the list, the most notable newcomer was Medco Health Solutions, a prescription benefits manager that was spun off from drug giant Merck & Co. Inc. last year. With revenue of $34 billion, it premiered at No. 41, but its initial public offering helped bump its former parent Merck to the 83rd spot from 17th last year.

The magazine noted that big pharmaceutical companies as a whole took a beating in 2003 due to expiring patents, competition from generic drugs and a backlash against expensive medicine.

Schering-Plough Corp., for example, dropped to 247th on the list from 187th as revenue fell from $10.2 billion to $8.3 billion.

On the upside, the Federal Reserve Bank’s decision to keep interest rates low boosted homebuilders. Centex Corp., Lennar Corp. and D.R. Horton Inc. all moved up considerably in the rankings.

Conspicuously absent was mortgage giant Freddie Mac, No. 32 on the 2002 list. That’s because its most recent financial statements were unavailable due to an accounting scandal.

One impressive jump was made by investor Warren Buffett’s Berkshire Hathaway Inc. The rallying stock market helped the Omaha-based holding company jump from 28th place to 14th with revenue of $64 billion.

This year marks the 50th time Fortune has published its annual rankings. A look at the original 500 reveals some familiar names — in 1955, General Motors was No. 1, General Electric No. 4, Chrysler No. 6 and Du Pont No. 10.

The No. 2 company was Standard Oil Co. of New Jersey. And another piece of John D. Rockefeller’s former empire, Standard Oil Co. of New York, or Socony, was No. 9. These two were predecessors of Exxon-Mobil, today’s No. 2.

Others were muscled out as manufacturing’s dominance in the U.S. economy dwindled. United States Steel Corp., which was No. 3 in 1955, is now 209th.