Fortune 500 Shows Upward Trend for Industry into 2012

Fortune magazine recently released their 2011 Fortune 500 list, the lionized itemization of the 500 biggest US companies by revenue. Predictably, Wal-Mart (No. 1) and Big Oil hold the top handful of spots, as they have for a number of years, but we thought it might serve to outline how the metals sector and other supply and manufacturing industries fared last year in the Fortune 500, and what it could mean for 2012.

If taken for its disparate parts, i.e. hundreds of companies’ earnings ranked in order, the Fortune 500 may not offer much of a picture, but as a whole, the list gives a panoramic glimpse of the American business landscape, and some trends may be gleaned from the editors’ time-honored compilation. Handy for us, Fortune’s editors are diligent enough to categorize the 500 companies by industry, and in general, 2010 looked like a pretty good year for metals-and-manufacturing-related industries, judging by the subtitled banner for the category (found in my double-issue print edition): “Once-struggling sectors are showing signs of life. Homebuilders returned to the list after a year off, and automotive revenues jumped 25%, to $465 billion.

So why not begin with their “Metals category, featuring 6 companies all of us are, undoubtedly, pretty familiar with. Alcoa is No. 1 in the category (123rd overall), with just over $21 billion in 2010 revenues. With Alcoa pushing forward on innovations and moving past certain acquisitions that burdened their bottom line in years past, Alcoa’s executives are bullish for aluminum’s future. US Steel is No. 2 (148th overall), with Nucor following close behind at No. 3 (157th overall). Nucor, however, posted 2010 profits of $134 million, while US Steel lost $482 million that year. Commercial Metals, based in Texas and operating several steel minimills and a copper tube mill in the US, came in at No. 4 (361st overall), followed by Steel Dynamics (368th) and AK Steel (383rd). Taken in total, the 6 companies made a collective $72.9 billion. (Reliance also made the overall list at 367th with $6.3 billion.)

General Motors and Ford both weighed in on the first page of the list, at No. 6 and No. 10, respectively. GM’s revenues increased 29.6 percent from 2009, marking the fourth-best showing year-over-year among the top 20, with, shockingly but perhaps not surprisingly, Fannie Mae posting a whopping 429% increase in revenues in 2010. (Fannie Mae is No. 5 overall in 2010, up from 81 in 2009 quite a jump.) Caterpillar had a good showing at 58th on the list, not to mention a good feature story in the print edition about weathering economic storms in the climate of emerging markets.

If anything, the overall trend appears to portend a positive forward curve as far as the global economy is concerned, with steel, aluminum, auto and construction companies looking to ride out the rest of 2011 and do much better in 2012. We can look for prices (and therefore revenues) to keep increasing ahead into the middle of the decade.

–Taras Berezowsky

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