In this article we are going to list the 5 least profitable companies in the U.S. For a detailed coverage of this topic and a more comprehensive list please take a look at the 16 least profitable industries in the U.S.
5. Auto Parts
Gross margin: 14.56%
Net margin: 2.16%
Even though it is one of the least profitable industries in the U.S., the industry is still expected to grow in the long term, even as care sales have continued to fall and a recession is threatening the country. According to Krungsri, chip shortages are one of the biggest pain points being faced by the auto parts industry, but the issue is expected to be resolved by 2024 to 2025. There is an additional concern for tire manufacturers as the U.S. will review its anti-dumping measures in July 2023, which could result in manufacturers being locked out of the U.S. market.
4. Healthcare Support Services
Gross margin: 14.72%
Net margin: 2.01%
While other areas in healthcare, such as pharmaceutical companies have really high margins comparatively, the healthcare support services industry has seen really low margins, in a country where privatized healthcare has resulted in most people being unable to afford basic healthcare without insurance. The biggest company in this sector is Cardinal Health, Inc. (NYSE:CAH). One of the impacts of declining margins is the closure of healthcare facilities, which includes 10 hospitals in Ohio closing their labor and delivery services in the past one year, as operation costs continued to increase.
3. Real Estate (Operations & Services)
Gross margin: 31.13%
Net margin: -0.76%
Even though the real estate industry has seen huge growth in the last few years, it is still one of the only industries in the country to have negative net margins. Some of the biggest companies in the industry include American Realty Investors, Inc. (NYSE:ARL) and Doma Holdings Inc. (NYSE:DOMA) among others. The fall in margins in the industry can be seen by the latest results of American Realty Investors, Inc. (NYSE:ARL) whose EPS for Q1 2023 decline to $0.18 from $0.7 in Q1 2022.
2. Food Wholesalers
Gross margin: 14.39%
Gross margin: 1.09%
Food wholesalers have the third-lowest gross margins among all nearly 100 industries in the U.S., which then directly translate into really low net margins as well.
1. Air Transport
Net margin: 21.20%
Gross margin: -1.71%
Topping the list of the 15 least profitable industries in the U.S. is air transport, one of the most impacted industries by the Covid-19 pandemic. However, airlines are finally posting profits in some quarters in 2022, and according to the International Air Transport Association, airlines will finally make money again in 2023 as more or less all restrictions on travel have been removed by most countries, which spells great news for some of the largest airlines in the world, including American Airlines Group Inc. (NASDAQ:AAL) and United Airlines Holdings, Inc. (NASDAQ:UAL).
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