Would you like to find out which were the most profitable companies in the world in 2014? These firms have managed to climb all the way to the top, boasting impressive levels of revenue and net income. The wealth they command is staggering, as is the number of assets in their possession, making them very powerful players in global markets and sometimes important partners for certain countries.
Despite what you may believe, most of the companies making an appearance in the following list of the most profitable companies in the world are not privately owned. In fact, seven out of ten are actually majority-owned by their respective governments, indicating that state-involvement can also boost a corporation’s profitability. After all, some governments have more than enough financial resources at their disposal to make large investments in these firms, allowing them to expand their business without having to take on the burden of large debt obligations.
If you read our previous post on the most profitable businesses, then you should certainly keep reading to find out what changes have occurred since last year. Those who have been following the rise of Chinese firms, have surely noticed that some have improved their positions significantly over the past decade. China has not only grown at impressive rates on a macroeconomic level, but some of its majority-owned corporations have also experienced exceptional growth. Hence, taking into account the recent shift of economic power towards Asia in general, and China in particular, it comes as no surprise to see several Chinese companies on our list.
In order to determine the most profitable companies in the world in 2014, we have used net income from continuing operations as our main tool of measurement. This is considered to be one of the best ways to rate a firm’s profitability, since it excludes extraordinary items from earnings. This allows us to rate corporations more accurately, since items that have little impact on the true profitability of the business are not taken into account.
According to the information we have considered, these companies were the most profitable in 2014:
10. Microsoft Corporation – $22.1 billion
Kicking off our list of the 10 most profitable companies in the world in 2014 is Microsoft Corporation (NASDAQ:MSFT). The firm has generated much of its income from catering software programs such as Office and Windows, to both businesses and households.
The list of the most profitable companies in the world in 2014 continues on the next page with the first, but not last, energy behemoth to make the list.
9. BP plc – $23.5 billion
As one of the largest firms in the energy sector, BP plc (ADR) (NYSE:BP) managed to remain very profitable, despite the negative impact the oil spill in the Gulf of Mexico has had on income.
8. Bank of China Ltd. – $25.5 billion
The fact that the Chinese government holds a two-thirds position in the firm has benefited the Bank of China immensely. Government backing has allowed the company to expand rapidly, turning it into one of the largest banks at home and abroad.
7. Agricultural Bank of China Limited – $27.1 billion
The next Chinese company to make it onto our list is the Agricultural Bank of China, which has seen profits surge thanks to a sharp increase in lending. No wonder it managed to achieve the second-largest IPO in the country’s history…
6. Samsung Electronics Co Ltd – $27.2 billion
Although just by a slight margin, Samsung has managed to reach the sixth spot on our list of the most profitable companies. This electronics giant is not only the largest firm in its home country of South Korea, but is known all around the globe for its great products.
5. Exxon Mobil Corporation – $32.6 billion
This company is surely one of the most important players in the energy industry, generating almost $400 billion in revenue this year. Exxon Mobil Corporation (NYSE:XOM) is the second-largest firm based in the United States and the largest in the world when it comes to market capitalization.
4. China Construction Bank Corporation – $34.9 billion
The next China-based company on our list belongs once again to the financial sector. A great deal of China Construction Bank Corporation’s profit was derived from net interest income, which amounted to nearly $64 billion.
3. Gazprom OAO – $35.7 billion
Following the Chinese model, the Russian government has benefited largely from its majority ownership of Gazprom OAO. Although natural gas is its core business, Gazprom’s vast investments have turned it into a highly diversified company.
2. Apple Inc. – $37 billion
You were probably already wondering where Apple Inc (NASDAQ:AAPL) would land on our list and might be surprised it hasn’t reached the pole position. Incredible sales numbers and rising profitability have turned Apple into the largest firm in the United States, in addition to its global penetration of electronics markets.
1. Industrial and Commercial Bank of China Limited – $42.7 billion
Despite being a new player in the global financial sector, the Industrial and Commercial Bank of China (ICBC) has managed to turn into the most profitable company in the world. Nevertheless, its size and exposure to government policy, and to certain products deemed risky, could harm this bank in the long-term.