2012’s Most Profitable American Companies

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5. JPMorgan Chase
> Forecast 2012 revenue: $100 billion, flat
> Forecast 2012 earnings: $19 billion, up 9%
> Stock price: $35.29
> Range: $34.99 – $35.68
> Market cap: $134.09 billion

JPMorgan is not as burdened with mortgage woes like Citigroup (NYSE: C) and Bank of America (NYSE: BAC). Its shares have appropriately outperformed those of the other two financial firms over the past six months. JPMorgan’s challenge will be to keep its consumer banking operation healthy because its investment bank and trading operations are likely to post mediocre results in 2012.

4. Microsoft
> Forecast 2012 revenue: $80 billion, up 8%
> Forecast 2012 earnings: $23 billion, up 12%
> Stock price: $27.81
> Range: $27.73 – $28.10
> Market cap: $233.94 billion

Microsoft (NASDAQ: MSFT) is often criticized because of the stock’s abysmal performance in the past decade. But with expected strong results for 2012, the direction of the share price may change. The Windows PC, Business, and Server franchises are still widely profitable. The open questions are mostly tied to Microsoft’s search engine operations and its mobile smartphone handset business, which is now part of its joint venture with Nokia (NYSE: NOK).

3. AT&T
> Forecast 2012 revenue: $127 billion, up 2%
> Forecast 2012 earnings: $22 billion, up 5%.
> Stock price: $29.59
> Range: $29.50 – $29.85
> Market cap: $175.29 billion

AT&T’s (NYSE: T) sales and earnings are a tale of two companies. The company’s wireless business, driven by the increasing use of data application and the expansion of new 4G superfast networks, continues to grow. But AT&T’s plan to further expand its wireless division was thwarted when the government blocked a deal to buy T-Mobile, the number four wireless firm in the U.S. The company’s traditional landline home phone service business, however, has continued to shrink as more people rely on VoIP and cell service.

2. Exxon Mobil
> Forecast 2012 revenue: $450 billion, down 7%
> Forecast 2012 earnings: $28 billion, down 3%
> Stock price: $85.49
> Range: $84.97 – $85.64
> Market cap: $409.77 billion

Exxon Mobil is the world’s largest oil company. Both its refining and exploration operations contribute equally to earnings. Exxon has also begun to move into the lucrative and rapidly growing oil sands business. The new competition in that business is as much from China as anywhere else. PetroChina (NYSE: PTR) has begun to aggressively acquire operations in oil sands centers like Canada. The biggest variable in Exxon’s earnings will be the price of oil. Most experts peg that above $100 for the balance of the year.

1. Apple
> Forecast 2012 revenue: $160 billion, up 48%
> Forecast 2012 earnings: $33 billion, up 60%
> Stock price: $422.76
> Range: $421.35 – $427.75
> Market cap: $392.92 billion

Apple’s earnings and sales growth continue to defy gravity. Apple should continue to hold wide leads over the competition, according to much of the research bout the smartphone and tablet PC industry. Apple is able to charge a premium for its products over those of its competitors like Samsung and HTC, which drives its impressive gross margins. Apple also stands to benefit from its current low market penetration in developing nations such as China, which will improve as 3G networks are more broadly deployed.

Douglas A. McIntyre