NEW YORK -- Sunoco, which saw a $9 million loss in late 2007, and ExxonMobil, which booked record quarterly and annual numbers last year, are in good company on the latest BusinessWeek 50 list of "top-performing companies" released this past week.
Surging oil prices aren't necessarily good news for refiners like Philadelphia-based Sunoco, the magazine notes. High prices benefit refiners only when they can pass costs on to consumers of refined products such as jet fuel and gasoline. That hasn't been the case recently.
Sunoco, which is No. 20 on the list, made money in 2007 but booked [image-nocss] a $9 million loss for the last three months of the year—vs. net income of $123 million for the same period in 2006.
Still, CEO John Drosdick has held fast to his shareholder-first ethos, hiking the dividend and spending $300 million last year to buy back shares. Sunoco's earnings should rise this summer, as gas prices hit record levels, the magazine notes.
Sunoco's 2007 sales were $41.8 billion, while net income was $891 million.
Meanwhile, ExxonMobil, No. 50 on the BusinessWeek list, broke its own profit record on Feb. 1 as it reported the highest quarterly and annual profits ever for a U.S. company. Exxon earned $40.6 billion in 2007. The company also bought back $28 billion in shares.
Still, CEO Rex Tillerson faces major obstacles to oil and gas production, including the maturation of oil fields, rising resource nationalism in countries like Venezuela, and higher costs for rigs, drilling, and refining, according to the magazine.
Just to keep production flowing at current levels, Exxon will hike its capital spending by $5 billion this year. But with oil above $100 a barrel, 2008 will likely be another gusher.
ExxonMobil's 2007 sales were $358.6 billon, while net income was $40.6 billion.
Other companies on the BusinessWeek 50 list include Starbucks (No. 16), Pepsi (No. 31) and Coca-Cola (No. 45).Click here to view the complete list.
To identify the companies on the list, the magazine focused on two core financial measures: average return on capital and growth, both taken over the previous 36 months. It also compared companies with others in their sectors, enabling the magazine to identify companies that are the best performers relative to their peers, even if their sector of the economy is not booming. According to the magazine, this prevents the situation, for example, in which oil companies rise to the top of the list when oil prices are rising and then drop off the list when oil prices are falling. Finally, the list was reviewed by a panel of editors, taking into consideration that financial measures applied mechanically sometimes miss the mark.
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