Each January, 24/7 Wall St. makes its predictions about which publicly traded U.S. companies it feels will have the highest profits in the year ahead. Last year, Apple (AAPL) intermittently edged ahead of Exxon Mobil (XOM) for the highest market capitalization in the Fortune 500, and in 2012, Apple is likely to pass Exxon Mobil as the most profitable corporation. The market appears to anticipate Apple will keep up a rapid growth rate comparable to that it has enjoyed for the past two years. The stock has repeatedly hit new highs recently and now trades at $425, up nearly 25% in the past year.
Most of the largest U.S. companies won't produce large year-over-year earnings swings, with the notable exception of financial firms. Most banks and investment houses will suffer earnings declines in 2012 due to poor trading results and bad loans, notwithstanding the fact that JPMorgan Chase (JPM), arguably the best-run bank in America, made our most-profitable list, as did Wells Fargo (WFC). Corporations like IBM (IBM) and Procter & Gamble (PG) have such huge customer bases worldwide that they can hardly outperform the global economy. What differentiates them is their ability to manage their operations better than peers as they keep expenses low and take all the advantages they can of their significant market shares.
24/7 Wall St. looked at the top 200 companies in the Fortune 500 based on revenue in the past reported year. We then reviewed earnings and earnings forecasts from Thomson/First Call. There were some cases in which earnings appeared to be too low or too high because they failed to reflect more recent events. We took those into account when we produced the final numbers.