In the second quarter of this year, U.S. corporate profits totalled $1.8 trillion after taxes. Massive corporate profit is not limited to the United States, although many of the world’s most profitable companies, including Apple, are U.S. based. Earnings of the world’s 10 most profitable companies, totalled $223.2 billion last year.
24/7 Wall St. reviewed companies’ operating income figures. While net income is the standard measure of profits, it can include items that do not reflect profitability such as extraordinary and discontinued items and sales of subsidiaries or major holdings. Earnings from continuing operations, however, excludes such items. Based on net income from continuing operations, one measure of profitability, 24/7 Wall St. reviewed the world’s 10 most profitable publicly traded companies.
Apple, the world’s most profitable company, reported in January third quarter 2014 earnings of roughly $18 billion, the highest single quarter of profits in corporate history. Record profits from services and increasingly strong sales of the iPhone and Mac continued to drive up revenue, according to the company. Johnson & Johnson wraps up the list as the 10th most profitable company in the world.
Three of the 10 companies — Exxon Mobil, Chevron, and PetroChina– operate in the oil and gas sector. However, while energy has historically been an extremely lucrative business, that may change in the near future. The price of a barrel of oil fell at the beginning of this year below $50 for the first time in five years. As of the middle of October, crude oil price was $48.82 per barrel, compared to the end of June 2014, when a barrel cost $100. While relatively cheap fuel is a welcome development for many motorists, the world’s largest oil companies have seen profits slip as a result.
Exxon Mobil reported profits of $33.6 billion last year, in line with its previous fiscal year’s earnings, which were down more than 40% from the year before. Chevron and PetroChina, two of the other most profitable energy companies in the world, also reported considerable declines in net income last year compared to fiscal 2013.
Similarly, while Samsung routinely makes the list of most profitable companies, the company is not necessarily exceeding expectations. Sales and operating profit fell considerably in 2014. According to the company’s financial report, the decline was largely due to poor performance in its smartphone sales.
Samsung is one of three other tech companies topping the list of the world’s most profitable companies.
Six of the world’s most profitable companies are headquartered in the United States, including global leader Apple, which reported net income of $39.5 billion in its most recent fiscal year. Of the remaining four, two are based in China, one in South Korea, and one in Japan.
To identify the most profitable companies in the world, 24/7 Wall St. reviewed the highest earnings from continued operations — a measure of net income — for public companies around the world with revenue of at least $20 billion. All company financial data was obtained using the Capital IQ Screening tool, accessed by researcher Brian Zajac on October 13, 2015, and are as of the most recent fiscal year for each company.
Financial statements of banks cannot be compared fairly to statements of other types of companies, so banks, which would have made up seven of the 10 most profitable companies in the world, were excluded from our analysis. Banks generate income from interest paid by borrowers, a fundamentally different process than that of manufacturing and service companies. Also, large profits from banks do not indicate the same kind of success they do for other companies.
These are the 10 most profitable companies in the world.
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