Exxon Mobil Takes Fortune 500 Top Spot, Edging Out Wal-Mart

Brian Glaser

Corporate Counsel

05-08-2012

Fortune magazine released the 2012 update of its Fortune 500 list, and the top spot has changed hands, with Exxon Mobil knocking Wal-Mart Stores Inc. out of the No. 1 position. Exxon has been ranked No. 2 on last year’s list.

While Wal-Mart’s recent bribery scandal has dealt a short-term fiscal blow to the retailing behemo, the oil giant’s ascension was driven by the simple fact of making an awful lot of money. As Fortune notes:

It's tough to beat the kind of year Exxon Mobil had in 2011. Shares rose by 20% and profits surged by 35% to $41.1 billion. Revenues jumped 28% to $452.9 billion . . . Exxon has certainly benefited from rising oil prices, particularly during the last quarter of 2011. But the company has also positioned itself well to capitalize on the latest controversial trend in domestic energy production: Fracking. Exxon now produces just about as much gas as it does oil, thanks to its $35 billion purchase of XTO Energy in 2010.

In addition to Exxon, two other energy companies are in the top five: Chevron is at No. 3 (right behind Wal-Mart, which fell to No. 2) and ConocoPhillips comes in at No. 4. The fifth slot is filled by General Motors, which rose up three spots from last year’s showing at No. 8.

Wal-Mart, which had topped the list for two consecutive years, slipped as a result of the still-struggling U.S. economy:

The retailer was forced to aggressively cut prices to reverse its declining same store sales in the U.S. That helped push revenues up by 6% during 2011, to $447 billion, but it hurt Wal-Mart's bottom line—profits declined by 4.6% during the year, to $15.7 billion.

The world's largest retailer has struggled to maintain growth at its U.S. stores, even as the economy has shown signs of recovery. Although the unemployment rate has fallen, the housing market remains unstable and consumer spending hasn't reflected a new attitude for many Americans.

And Wal-Mart’s slide down to second doesn’t reflect the current financial woes it faces as fallout from April’s Mexico bribery scandal (Fortune’s rankings are based on the previous year’s gross revenue, among other factors).

In an interview with CBS News about the list, Fortune managing editor Andy Serwer said the list shows that “Corporate America is doing great right now,” but he added:

The consumer in America, not so great. Government in the United States, not so well. But businesses are doing well. They've really come out of the downturn, doing things right. They're in good shape. A lot of that has to do with the fact that they've cut back. They've cut costs during the downturn meaning layoffs quite frankly. That's why profits are so high.

The total 2011 earnings among the 500 companies on the list was $825 billion, a record high number.

Another group that did well in the latest rankings: women CEOs. “This year's Fortune 500 has made history with the female 18,” Bianca Bosker writes in The Huffington Post. “The 2012 ranking of the 500 largest corporations in the United States includes a record 18 firms helmed by female CEOs, up from 12 companies in 2011.”

To see this year’s full Fortune 500 list, visit the Fortune site.

See also: "The Wal-Mart Bribery Scandal on CorpCounsel.com," CorpCounsel, April 2012.