America’s $10 Billion Club

Despite a sluggish labor market and stagnant wages for most workers, U.S. companies still managed to earn near-record profits in 2012.

We wonder: How many of the top 500 U.S. companies generated $10 billion or more in profits in 2012?

[toggle title_open=”A. 189 is not correct” title_closed=”A. 189″]

There were far fewer than 189 U.S. companies with $10 billion or more in profits in 2012. However, 189 companies were successful enough to earn at least $1 billion in profits last year, based on data compiled by Fortune magazine.

Thus, almost 40% of the Fortune 500 companies earned profits in excess of $1 billion. The company that barely made it past the $1 billion milestone was TRW Automotive, a manufacturer of automotive parts and systems based in the Detroit suburbs.

Fortune ranks the top 500 U.S. companies based on their gross revenues. To be included in the current list, a company needed to have revenues of almost $5 billion in 2012.

As a group, the Fortune 500 companies had total revenues of $12.1 trillion in 2012. That is equal to about 77% of U.S. GDP ($15.7 trillion). In fact, their combined revenues are larger than the annual economic output of all countries in the world except the United States.[/toggle]

[toggle title_open=”B. 55 is not correct” title_closed=”B. 55″]

There were 55 companies in the Fortune 500 that generated no profit at all in 2012. These companies — which represent over 10% of the 500 U.S. companies with the largest annual revenues — lost a combined $59.4 billion.

California-based Hewlett-Packard, a manufacturer of computers and printers, was the only company to lose more than $10 billion last year. The company lost a total of $12.65 billion, in large part due to the accounting fraud relating to its acquisition of software company Autonomy.

Other well-known companies that had losses in 2012 were Amazon, Barnes & Noble and Best Buy. The largest loss of all time occurred at AIG, which lost $99 billion in 2008, in the aftermath of the housing market crash.

The Fortune 500 companies represent just over one-eighth of the 3,687 companies traded on U.S. stock markets.[/toggle]

[toggle title_open=”C. 38 is not correct” title_closed=”C. 38″]

Only 38 of the Fortune 500 companies broke the $5 billion profit barrier in 2012. One of them was the entertainment and media company Walt Disney, with profits of “only” $5.7 billion.

Taken together, the Fortune 500 companies employed 26.4 million people in 2012 — a number larger than the population of the state of Texas, the second most-populous U.S. state.

The U.S. company with the highest revenues in 2012 was retail and grocery giant Wal-Mart, at $469.2 billion. Since Fortune began compiling its top 500 list in 1955, only three companies have ever held the top spot: General Motors, ExxonMobil and Wal-Mart.[/toggle]

[toggle title_open=”D. 17 is correct” title_closed=”D. 17″]

There were a total of 17 U.S. companies that made more than $10 billion in profits in 2012. Three of those companies each exceeded $25 billion in profits — two oil companies and one technology company: ExxonMobil ($44.9 billion), Apple ($41.7 billion) and Chevron ($26.2 billion).

Combined, the 17 most-profitable companies earned more than $318 billion in profits last year on revenues of $2.5 trillion. Other companies among the top 17 were Wells Fargo, Microsoft, IBM, Pfizer, Intel, Johnson & Johnson and Google.

The combined profits earned by all 500 of the Fortune 500 companies in 2012 was $820 billion — just $4 billion less than in 2011, their most profitable year of all-time.[/toggle]

This quiz was featured as a segment on the Marketplace Morning Report with David Brancaccio on November 29, 2013. You can stream the audio of the segment here.