It usually requires years and years of steady sales declines for a major public company to lose a substantial share of its revenue. Only a handful of S&P 500 companies had revenue fall by more than 10% last year. Using their size, large companies are able to hedge their bets and diversify operations so that any sudden market change will not disproportionately affect their top line number.
Sometimes, however, due to market forces such as unexpected changes in demand or commodity prices, a leading U.S. company’s reported sales can tumble by billions of dollars in one or two years. Revenue declined at a number of companies by more than one-third in three years. At Apache, a petroleum extraction company, revenue fell by 61.4% from the fiscal 2012 year to fiscal 2015. 24/7 Wall St. reviewed the 15 S&P 500 companies that reported the largest revenue declines from fiscal 2012 through 2015.
For most of these companies, plunging oil prices led to their sudden and rapid revenue decline. The price of oil began falling in 2014 after the price of West Texas Crude reached a high of $110 per barrel. The slump has persisted through today, and oil fell below $30 a barrel at the beginning of this year, right as most companies were producing their annual reports for the 2015 fiscal year.
Of the 15 companies on this list, 11 either produce petrochemical products or are oil and gas extraction companies. The 10 biggest decliners, including industry giants such as Exxon Mobil, Chevron, and ConocoPhillips, are all oil companies.
Several of the remaining companies have struggled to cope with the slowing growth across the Chinese economy. The lower demand from the massive Asian economy affected construction and mining equipment manufacturer Caterpillar’s top line. Declining Chinese agricultural imports bit into fertilizer manufacturer CF Industries’ revenue.
To identify the fastest shrinking companies, 24/7 Wall St. reviewed the most recent three-year annual revenue changes of S&P 500 companies. All annual revenue figures were obtained from a Capital IQ screen accessed on September 30, 2016. All other information came from financial documents filed with the Securities and Exchange Commission. To ensure that the declines of these companies are primarily organic, we excluded companies whose revenue decline was likely due to a large-scale spin off or divestiture. Such was the case with eBay, for example, which spun off PayPal in 2015. All revenue and profit figures, unless otherwise noted, are from Capital IQ.
These are America’s fastest shrinking companies.
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