ExxonMobil Number 1

Fueled by last year's merger, particularly in sales of exploration and production, ExxonMobil Corporation has emerged as this year's top US company in World Trade's annual review of leading US and foreign firms.

ExxonMobil Corporation's operations have expanded to over 100 countries, and sales in 1999 gushed in quicker than for the company's leading competitors. ExxonMobil Corporation's sales increased 59.8% during 1999, while Texaco Inc.'s sales were up 13.2%, Chevron Corporation came in with a 20.4% growth rate, while Phillips Petroleum Company's sales were up 17.5%. Eighty-four percent of ExxonMobil Corporation's revenue during 1999 was derived from refining and marketing, while exploration and production, chemicals, and other activities made up the balance.

Sales during the first quarter of 2000, which totaled $47.78 billion, are ahead of last year's first quarter sales figures, which amounted to $37.98 billion. Although most of ExxonMobil Corporation's sales are generated in foreign countries, sales in the US last year increased 134% to $53.21 billion.

ExxonMobil Partners with Giant GM

And the big are only getting bigger, it seems. In August, ExxonMobil Corporation and General Motors Corporation, World Trade's number-two ranked US company, announced the development of a highly efficient gasoline fuel processor for fuel cell vehicles. General Motors says it will be ready for a vehicle demonstration using this technology within 18 months. The processor uses gasoline as a fuel to create a high-quality stream of hydrogen that powers a fuel cell. For consumers this means they will be able to fuel these new vehicles the same way they fuel their present cars. Although General Motors has high hopes for this technology, according to the company's vice chairman, Harry J. Pearce, "We have significant commercial challenges, such as designing and building a large number of hydrogen refueling stations, developing feasible on-board fuel tanks and agreeing to industry-wide specifications," he says.

Unlike ExxonMobil Corporation, most of General Motor's sales last year were in the US-73.7%, or $130.07 billion. The company also experienceD healthy sales increases in Canada and Mexico-up 15.5% to $12.66 billion. Other regions didn't fare so well. Sales in Europe dropped 6.5% to $27.90 billion, Latin America was down a whopping 41.2% to $4.52 billion, while sales in other foreign regions were off 2.9% ($1.41 billion). In addition to vehicle manufacturing, General Motors' other services include consumer vehicle financing, fleet leasing, residential and commercial mortgage services, and vehicle and homeowners insurance. The company has operations in the US, Europe, Canada, Mexico, Germany, the UK, Australia, Spain, and Brazil. Automotive products accounted for 88% of General Motors' revenues in 1999; financing and insurance operations made up the remaining 12%.

Meanwhile, record sales of light vehicles (passenger cars, station wagons, vans, sport utilities, pick-up trucks, and "cross-over vehicles") were an unexpected bright spot for the company. Although the market was forecast to decline in this area, it actually rose to a historical high of 16.9 million units. In 1986, sales of these products hit a record 16.1 million units. This year should yield impressive results, too, given that the US economy is still expanding and demand from Asian nations has begun to return. Some forecasts say sales of light vehicles could reach 17.7 million units in 2000.

Wal-Mart Continues to "Wow 'Em"

The health of the US economy undoubtedly goes hand in hand with the sales performance of leading US firms. Consumers have money to spend, and they're spending it in abundance at the nation's retailers. Wal-Mart Stores now operates discount stores and supercenters in all 50 states.

Internationally, Wal-Mart Stores has wholly owned operations in Argentina, Canada, Germany, Korea, Puerto Rico, and the UK, in addition to joint venture operations in China and majority-owned subsidiaries in Brazil and Mexico. In fact, Wal-Mart de Mexico also ranked high on World Trade's Latin America list. Wal-Mart de Mexico operates a chain of retail and wholesale outlets in the form of self-service department stores, discount warehouse stores, supermarkets, hypermarkets, clothing department stores, restaurants, and members-only wholesale outlets. The group is the second largest by weight in the Mexican Stock Exchange in terms of market capitalization.

Most of Wal-Mart de Mexico's 385-plus stores, which go by the names Aurrera, Bodega Aurrera, Suburbia, Superama, and Vips (restaurants), as well as Wal-Mart Supercenters and Sam's Club warehouses, are located in central Mexico. In particular, Bodega Aurrera and Sam's Club warehouses generate nearly 50% of the company's sales in that part of the country.

Rounding out the Top 10 US Firms

Automotive sales drove Ford Motor Company's numbers up 12.6% in 1999, although not all segments of the company's business ventures performed as well. Vehicle and equipment rentals, for instance, fell 10.9% to $5.56 billion. However, this segment makes up only a small portion of the company's overall sales. Nearly 70% of Ford Motor Company's sales, or $112.42 billion, were in the domestic US market. In 1999, sales in Europe were up 22.8% to $33.18 billion.

Since 1995, sales of GE Capital Services have become increasingly important to General Electric Company. Five years ago, GE Capital Services accounted for only 38% of GE's total sales, but in 1999 the business raked in half of the company's sales. It's also the fastest-growing segment for GE: 112% versus 28% for all other segments during the previous four years.

Despite the economic quagmire that has plagued Japan for some time now, the country has managed to continue serving as a lucrative market for many US companies. Sales for IBM increased 21.5% to $10.41 billion in Japan during 1999-a growth rate that was much higher than the company's overall sales rates.

But while IBM experienced increased sales last year, the rate at which they increased was slower than that of some of its competitors. IBM's sales increase of 7.2% was less than at Compaq Computer (up 23.6%), Dell Computer (38.5%), and Cisco Systems (43.7%).

Next to automobile manufacturers, telecommunications companies are the most-represented industry among the top 10 US firms-namely, AT&T and SBC Communications. AT&T's strategy has included establishing alliances and joint ventures in key foreign markets with well-known telecom companies. In 1999, the company acquired Tele-Communications, Inc., IBM Global Network, Vanguard Cellular Systems, Inc., and Metronet Communications Corporation. AT&T also entered into a definitive merger agreement with MediaOne Group. Business services accounted for 40% of revenues in 1999; consumer services, 35%; wireless services, 12%; broadband, 8%; and other and corporate, 5%.

Over three-quarters of SBC Communications' revenues came from wireline services in 1999. This segment covers landline telecommunications services including local, network access, and long-distance services, as well as messaging and Internet services. SBC Communications reported sales of $49.49 billion for the year ending December 1999. This is an increase of 72% compared to 1998, when the company's sales were $28.78 billion. Sales at SBC Communications have risen during each of the previous five years, and since 1994 have increased a striking 326%.

One might suspect that tobacco companies' sales would have slumped in the past few years given the high-profile class-action lawsuits against them, coupled with the perception that fewer people are smoking nowadays. That's not the case at Philip Morris, at least. During the past five years, tobacco sales have played a more significant role in the company's overall revenue picture. Last year, tobacco sales accounted for 76% of Philip Morris' total revenues versus 61% of total sales in 1995. The remainder of Philip Morris' revenues came from sales of food and beer, with nominal sales derived from financial services. Although sales in the US, the company's primary market, grew during 1999, sales in Europe experienced a slight decline to just over $25 billion.

Completing the top 10 companies on World Trade's US list was ninth-placed Boeing Company. While Boeing has enjoyed four consecutive years of sales growth, the outcome for 2000 appears questionable. For the second quarter of this year, sales at Boeing totaled $14.84 billion, compared to $15.13 billion over the same period last year. Furthermore, during the first half of this year, sales have totaled $24.75 billion, or a decline of 16.2% compared to the first two quarters of 1999. Boeing's sales of customer and commercial financing performed well, as did sales of commercial aircraft. However, sales of information, space, and defense systems were down 4.2% in 1999 to $19.05 billion.

The Hot Industries? Think Merchandising in the US

Americans love to spend money, and the industry rankings confirm that fact (see the pie chart in "Market Focus," p. 32). The US economy, and foreign economies in general, are also relatively strong. Sales in the retail sector have grown in recent years and are expected to continue over the next few years, even though the US economy is likely to slow down.

The National Retail Federation says buyers are finally taking a breather, thanks to higher interest rates and gas prices. However, the industry association notes that certain types of retail stores, such as general merchandise stores, apparel specialty stores, and furniture and home-furnishing stores, tend to do better than others because rising interest rates have less effect on spending for apparel and other soft goods. Sales in this particular subsector are forecast to rise 7.5% this year, not much less than last year's 7.7% gain.

While consumer spending will slow down, it certainly won't halt altogether, believes Rosalind Wells, chief economist for the National Retail Federation. "Many consumer fundamentals remain in good shape, such as income growth, low inflation, and low unemployment," she remarks.

Merchandisers also know that consumers in other countries are attracted to US products, fashions, and fads, and the larger chains have been opening stores in overseas markets in record numbers. Naturally, the Internet has played a huge role in expanding sales, too. The lack of a physical presence overseas is no longer an impediment-one look at the booming e-commerce statistics confirms this fact.

While merchandising takes the cake (or pie chart) in the US, other industries prevailed in the foreign rankings. In Europe, the automobile and energy industries were the leaders. Only one merchandiser, Germany's Metro, made the top 25 list. Merchandising also trailed in Latin America, where telecommunications was the most represented industry.

The Global Leaders

Most economists predict it will be some time before Japan's struggling economy will turn around. Yet, Japanese companies dominate other Asian companies in sales. National dominance is also true for Latin America, where the leading companies are basically split between Brazil and Mexico. In Europe, at least, the rankings were a bit more mixed among the UK, Germany, France, and Italy.