Each January, 24/7 Wall St. forecasts the publicly traded U.S. companies that will have the highest profits in the year ahead. This year, Apple almost certainly will keep first place, well ahead of number two Exxon, as the most profitable corporation in America. It already passed the oil giant in market capitalization. However, while the market appears to anticipate continued rapid growth from Apple, its prospects have dimmed somewhat. After reaching all-time highs last year, Apple’s stock advance has stopped and shares have sold off recently.
The list of most profitable companies is still dominated by oil companies, banks and big tech. A look back at profits over the past five years shows that this trend has continued. Some of these companies have not grown much on the top line of revenue for several years. But they continue to be earnings machines because of their long-time sales success, which will help them produce higher profits in the foreseeable future. Microsoft is the best example of this. The software company is no longer considered a leader in the tech world, a position taken by public corporations like Google. Yet, Microsoft’s Windows and business franchises still have huge profit margins. Microsoft’s net income is greater than that of almost all other tech firms.
24/7 Wall St. used Capital IQ data to identify companies with the largest profits, defined as net income, over the past 12 months. This included revenue and earnings forecasts and pricing data. We then reviewed earnings forecasts for the final quarter of 2012 and for the full year of 2013 to gauge growth prospects for this year. In addition, as part of the process, 24/7 Wall St. looked at the top 1oo companies in the Fortune 500 based on revenue. We again reviewed earnings and earnings forecasts for these based on Cap IQ data. In some cases, earnings appeared to be too low or too high because of events in the past month. We took those into account when we produced the final numbers.
These are 24/7 Wall St.’s 10 most profitable companies of 2013.