A notable feature of all high revenue earners this year was the amount of revenues earned as an offshoot of globalisation. Yes, of the 32 companies that earned more than $50 billion in revenues, a swashbuckling 65.63% earned more than 20% revenues from outside America. In this regard, too, the leader was Exxon Mobil, which earned a gargantuan 72.2% of its revenues from non-US customers. Others in this list include HP (66.6%), Dow Chemical (65.9%), Chevron (65.7%) and IBM (63%).
Of those who lost money in 2007, GM, with net losses of $38.73 billion ensured that auto companies retained the ‘tainted’ title (Ford was the odd one with losses of $12.61 billion in 2006), followed by Sprint Nextel with losses of $28.58 billion and Merrill Lynch ($7.78 billion). In all, 57 companies recorded losses of $116.7 billion, a dejecting rise in net aggregate loss of 141.12%. Another 183 companies reporting lower profits for 2007 – a rise of 17.51% in count over last year.
As per Fortune’s Geoff Colvin, “The IMF has lowered its estimates of world growth for 2008, and the higher cost of capital is hurting businesses that need to borrow – which means everyone...” This is followed by the prediction of the US economy weakening further and unemployment rising to an alarming 5.6% as per National Association for Business Economics. With over 56% economists predicting a recession in US as per the report, surely time, profits and even revenues for America Inc. will get harder in 2008. Year 2008 will perhaps even see topline tumbling with US economic growth predicted to grow by just 1.4% in 2008 (from 2.2% in 2007) as Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group confirms, “The economy is still going to be weak in the very near term…’’ Even Ellen Hughes-Cromwick, President, NABE & Chief Economist, Ford Motors professes, “Although housing and credit markets will gradually loosen their grip, US economic growth is expected to ‘only slowly’ return to health.’’ ‘Slowly’, mind you!
Watch out for the 2008 Global 500 list… the count of losers sadly will increase further and winners will remain the same with the glorious top five top-line & bottom-line champions remaining unchanged. And yes, only those with well diversified global operations will score better over last year!
Of those who lost money in 2007, GM, with net losses of $38.73 billion ensured that auto companies retained the ‘tainted’ title (Ford was the odd one with losses of $12.61 billion in 2006), followed by Sprint Nextel with losses of $28.58 billion and Merrill Lynch ($7.78 billion). In all, 57 companies recorded losses of $116.7 billion, a dejecting rise in net aggregate loss of 141.12%. Another 183 companies reporting lower profits for 2007 – a rise of 17.51% in count over last year.
As per Fortune’s Geoff Colvin, “The IMF has lowered its estimates of world growth for 2008, and the higher cost of capital is hurting businesses that need to borrow – which means everyone...” This is followed by the prediction of the US economy weakening further and unemployment rising to an alarming 5.6% as per National Association for Business Economics. With over 56% economists predicting a recession in US as per the report, surely time, profits and even revenues for America Inc. will get harder in 2008. Year 2008 will perhaps even see topline tumbling with US economic growth predicted to grow by just 1.4% in 2008 (from 2.2% in 2007) as Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group confirms, “The economy is still going to be weak in the very near term…’’ Even Ellen Hughes-Cromwick, President, NABE & Chief Economist, Ford Motors professes, “Although housing and credit markets will gradually loosen their grip, US economic growth is expected to ‘only slowly’ return to health.’’ ‘Slowly’, mind you!
Watch out for the 2008 Global 500 list… the count of losers sadly will increase further and winners will remain the same with the glorious top five top-line & bottom-line champions remaining unchanged. And yes, only those with well diversified global operations will score better over last year!
For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
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