Three of the latest reports from the Delaware firm 24/7 Wall St. LLC, “The Most Innovative Companies in the World,” “The Most Hated Companies in America,” and “2012’s Most Profitable America[n] Companies,” scrutinized financial and other relevant data to help the public understand the inner workings and outside perceptions of a number of large corporations.
The firm 24/7 Wall St. was formed to provide online financial insight from different perspectives about local and global companies. It has a large global following for its 35 daily articles, which might be written from the perspective of a firm’s insider or an outsider.
“The editors of 24/7 Wall St. do not own securities in companies that they write about. Other writers may have positions in companies and these are disclosed in their articles. ... Articles are simply the opinions of the writers,” according to the 24/7 website.
Pioneers of the World—Do Patents Matter?
“24/7 Wall St.’s review of the IFI [IFI Claims Patent Services, a division of Fairview Research] list finds that producing the most patents does not ensure a successful business—frequently, it can mean the exact opposite,” according to 24/7 in their report about innovative companies.
IFI maintains a global patent database from data provided by the U.S. Patent and Trademark Office (USPTO) and annually produces a list of the 50 most innovative firms.
International Business Machines Corp. (IBM) was again first on the list, as it has been over the past 19 years, with 6,180 utility patents in 2011, around 5 percent more than in 2010. Utility patents are patents from the mechanical, electrical, and chemical categories.
“Utility patents are the most common patent type and a primary means of protecting intellectual property and technological innovation,” explains IFI in a recent press release.
In 2011, the majority of companies, 8 of the top 10 companies on IFI’s list, being granted patents by the USPTO were from Asia. Asian firms captured 25 of the top 50 spots, while the U.S. corporate world only captured 17 spots.
Surprisingly, the majority of firms in the top 10 category are unsuccessful businesses. The stock price of seven of these companies dropped by almost half during 2011.
“Five of the companies also lost money last year. Hitachi and Panasonic, both in the top 10, each lost more than $1 billion,” according to the 24/7 report.
The three most successful companies among the top 10 were Microsoft Corp., a software company, IBM, a computer products firm, and South Korean firm Samsung Electronics Co. Ltd., which has investments in many of the world’s technology-based firms.
IBM’s net income for 2011 was $15 billion, and its shares increased from $144 on Dec. 31, 2010, to just below $192 on Jan. 25, 2012. Microsoft’s net earnings for 2011 were $20.6 billion, however its stock price wasn’t as successful, and was basically flat for the year going from $27 on Dec. 31, 2010, and trading at just over $29 on Jan. 25, 2012. Samsung’s earnings were $13.7 billion in 2011, and its share price in Korean currency increased by over 13 percent during 2011.
Apple Inc., whose name has been in the press frequently and runs a highly successful operation, ranked 39 among the top 50, as it only brought to the market a few highly successful products.
Eastman Kodak Co., a multinational imaging and photographic equipment company, “meanwhile, is filing for bankruptcy, despite being one of the top patent recipients for years,” according to the 24/7 report.
Loathing the Corporate World
To build the list of the most disliked firms in the United States, 24/7 researchers looked at shareholders’ wealth and how the company compared to other firms in its industrial sector, financial analyst reports, corporate expert opinions, including consumer and academic reports, consumer satisfaction indices, as well as “views of taxpayers, Congress and the White House—where applicable.”
The decision as to which companies to include in the list of the “Ten Most Hated Companies in America” was difficult, as “several companies that should have been on the list based on performance and public perception during the financial crisis did not make it,” according to the 24/7 report.
The list includes only private sector firms. Therefore, the two government-sponsored enterprises Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp.) weren’t included. They didn’t make it because their shares were delisted, and they are now under the auspices of the U.S. government.
Another candidate could have been the U.S. Postal Service, as taxpayers keep it alive by pumping billions of dollars into its operations. This government-owned entity reported losses over the past years, including a loss of $5.1 billion for 2011 fiscal year. The loss would have been $5.5 billion higher were it not for legislation allowing it to postpone the funding of retirement benefits.
The 10 most hated companies in 24/7’s list are: Facebook Inc.; American Airlines Inc.; AT&T Inc.; Nokia Corp.; Goldman Sachs Group Inc.; Best Buy Co. Inc.; Bank of America Corp.; Johnson & Johnson; Sears, Roebuck and Co.; and Netflix Inc.
Given personal privacy issues and a damaging customer satisfaction survey, Facebook “is the lowest-scoring site, not only in the social media category, but of all measured companies in this report,” according to the American Customer Satisfaction Index in a July 2011 survey results release.
American Airlines not only filed for bankruptcy last year, but also was said to be among the worst airlines in 2011 in an article on the U.S. News website. A Wall Street Journal article, published Jan. 5, called American Airlines the worst customer-friendly airline in 2011 for losing bags and canceling flights.
Goldman Sachs joined the list of the most hated corporations because of continued fraud allegations after paying a fine of $550 million in 2010.
What is considered the most damaging is that according to a Wall Street Journal article quoted by the 24/7 research report, “Goldman agreed to forgive 25 percent of principal balances on 143 mortgage loans to borrowers in New York, or $13 million of a total principal balance of $52 million. The $13 million is less than a senior banker at Goldman might make in a year.”
Achieving the Highest 2012 Profits in the US
“Each January, 24/7 Wall St. forecasts the publicly traded U.S. companies that will have the highest profits in the year ahead. This year, Apple (NASDAQ: AAPL) is likely to pass Exxon Mobil (NYSE: XOM) as the most profitable corporation in the Fortune 500,” predicted a Jan. 10 24/7 report on the most profitable American companies.
Apple Inc. already jumped ahead of Exxon Mobil Corp. for a few months in 2011, and on Jan. 25 it came very close after its shares jumped 6.2 percent following another blowout quarter. Financial gurus predict that Apple will outpace Exxon Mobile during 2012. Apple’s stock started trading at $3 on Sept. 7, 1984. More than 10 years later on Jan. 2, 2001, the stock price broke $10. During the next 10 years, the stock price continued to climb, reaching $210 on Jan. 1, 2010, breaching $329 on Jan. 3, 2011, and jumping to $466 on Jan. 25, 2012. To its credit, Apple also has over $100 billion in the bank and no debt.
The 10 U.S. firms believed to be the top 2012 earners are, Wells Fargo & Co., Proctor & Gamble, Johnson & Johnson, Berkshire Hathaway Inc., IBM Corp., Wal-Mart Stores Inc., Chevron Corp., JP Morgan Chase & Co., Microsoft Corp., AT&T, Exxon Mobil, and Apple. The first three listed are tied for tenth.
“Most of the largest companies in the U.S. will not have large earnings swings from last year. ... Corporations like IBM (NYSE: IBM) and [Proctor] & Gamble (NYSE: 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,” said the 24/7 report.
