Buried among the news of Apple Inc.’s (NASDAQ: AAPL) successful launch of its smartwatch, CEO Tim Cook’s $65 million payday and a forecast that the public company’s market cap might reach $1 trillion is that, in the final tally of net income among American companies for 2014, Apple was the county’s most profitable firm. Most experts in corporate finances already believed this would be the case, but it has been proven as the last 10-K of the S&P 500 has been filed.
The gap between Apple’s profit and the second most profitable company was a large one. Exxon Mobil Corp. (NYSE: XOM) made $32.5 billion last year, but its revenue was much larger at $365.4 billion. Apple’s revenue for the period was $182.8 billion, about half of Exxon’s. The spread between Apple and the next large tech company in net income was mammoth. Microsoft Corp. (NASDAQ: MSFT) made $22.1 billion.
Apple’s road to profit is unusual compared to most successful large America companies. It sells units of things. In Apple’s case, those things are phones, tablets and personal computers. While it has software and entertainment businesses, they are not large. Among other profitable corporations are commodity exploration and distribution companies such as Exxon and Chevron Corp. (NYSE: CVX), banks such as Wells Fargo & Co. (NYSE: WFC) that collect and distribute capital, and conglomerates such as General Electric Co. (NYSE: GE) and Berkshire Hathaway Inc. (NYSE: BRK-A).
ALSO READ: America’s Highest Paying Companies
For years, oil companies were at the top of the profit food chain among U.S. public companies. The sole exception to that was Wal-Mart Stores Inc. (NYSE: WMT). As the world’s largest retailer, it was not very profitable on a margin basis. However, its revenue was so huge that it did not need much of a margin to produce high net income.
In the final analysis, oil companies and banks do not have to reinvent a product. Apple’s climb to the position of the most profitable company in American has been based on constant reinventions, which makes the figure all the more remarkable.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
