Low oil prices weren't bad for everyone.
The oil and gas glut sank the profits of many Fortune 500 companies last year—but not all. Here are the biggest gainers last year by profit in 2015 over the year before. Oil may have been bad for energy companies, but it gave others, like airlines, a nice lift.
1. HD Supply
Fortune 500 Rank: No. 320
Annual profit: $1.47 billion
The industrial distributor’s leads the list this year with a massive swell in bottom-line profit: net income soared to $1.47 billion for the latest fiscal year, compared to just $3 million the prior year. The gain had little to do with revenue growth, though sales did climb 6%. Most of the gain can be attributed to a massive $1.01 billion tax benefit, as well as a tax credit from the settlement of an IRS audit and a tax gain tied to an asset sale. HD Supply—with 550 locations across 48 states and six Canadian provinces—is projecting more modest growth this year, seeing end market growth of 3%.
The e-commerce giant generated a ton of press last year when it officially went through a planned spinoff of the company’s PayPal business, a digital payments company it acquired for $1.2 billion that is now worth over $46 billion on its own. But eBay’s big, soaring profit gain had little to do with a smoother focus as a standalone business. The big gain is due to steep year-earlier comparisons, as eBay back in 2014 booked $3 billion in deferred tax liabilities related to foreign earnings for 2013 and prior years. Without those tax-related liabilities, profit surged to $1.73 billion from $46 million a year earlier.
The firm, which provides communications services to businesses and governments, reported a huge jump in 2015 profit—$3.43 billion vs. $314 million—due to a $3.3 billion income tax benefit that accounted for most of the bottom-line boost. Those two profitable years comes after Level 3 generated millions in net losses for 2013 and 2012. Looking ahead, Level 3 is projecting revenue growth and sees a jump in adjusted earnings for 2016, though the company doesn’t provide net income guidance targets.
The drugstore chain, which inked a poorly timed deal to buy the Eckerd and Brooks brands just ahead of the global financial crisis, had for years been stuck in the red as it struggled with a high debt load. Things turned around in fiscal 2013 when Rite Aid finally logged a modest profit, and two years later, the bottom line soared because of a $1.72 billion income tax benefit. With a sturdier performance comes suitors: larger rival Walgreen Boots Alliance in October agreed to pay $9.4 billion for the company, though the deal is still in limbo.
5. Delta Air Lines
Fortune 500 Rank: No. 68
Annual profit: $4.53 billion
The airliner’s bottom line soared to $4.5 billion in 2015 from $659 million the prior year, bolstered by a $5.9 billion decrease in fuel expenses, as well as reduced hedge losses. The biggest change on Delta’s financials was for “aircraft fuel and related taxes,” which fell to $6.5 billion from 2014’s $11.7 billion. Revenue grew, but only 1% to $40.7 billion. “Our 2015 performance was a record for Delta on all fronts—with industry-leading operational performance, superior customer satisfaction, and a $5.9 billion adjusted pre-tax profit,” Delta CEO Richard Anderson said earlier this year.
The airline has found itself in the news for all the wrong reasons in recent months. Former CEO Jeff Smisek resigned because of probes into United’s relationship with the Port Authority of New York, while his successor Oscar Munoz suffered a heart attack last October after just weeks on the job. Munoz returned to the company full time in March. Operationally, exited 2015 with a bottom line that was sailing upward. Net income increased to $7.3 billion from $1.1 billion a year earlier, boosted by a $3.1 billion benefit tied to the company’s income tax valuation allowance, as well as a sharp drop in fuel costs.
On the surface, the results Prudential Financial posted last year weren’t exceptionally impressive. Total revenue dropped to $48.6 billion from $49.6 billion in 2014, with after-tax adjusted income only modestly climbing on lower expenses. But the full bottom line picture is far more favorable, as 2014’s were dragged lower due to billions in pre-tax losses related to foreign currency exchange rates, mainly driven by changes in the value of the Japanese yen. That gave 2015 a boost. CEO John Strangfeld called 2014 a “success,” saying Prudential met the company’s financial objectives and touting an increase to the quarterly dividend in December and a big increase in share repurchase authorization for this year.
Foodservice distributor Performance Food Group posted a higher 2015 profit in the simplest way possible: it reported higher sales. Unlike many other firms on this list, which generally see their bottom line swing due to extraneous factors unrelated to day-to-day operations, Performance Food Group posted a 12% jump in sales to $15.3 billion. That led profit to jump to $56.5 million from 2014’s $15.5 million. Not too shabby of a start for the newly public firm, which launched its IPO last October.
Fortune 500 Rank: No. 94
Annual profit: $7.27 billion
The snacking giant last year reported a sharp 13.5% drop in net revenue but profit soared to $7.3 billion last year from $2.2 billion, as the bottom line was helped by a $6.8 billion one-time gain related to Mondelez’s move last summer to unload the company’s coffee brands in exchange for cash and a 49% stake in a new firm called Jacobs Douwe Egberts. That more than offset a $778 million charge Mondelez booked last year related to the company’s Venezuela operations.
The only bank to make the top 10, Bank of America reported an annual profit of $15.89 billion in 2015, soaring above the prior-year total of $4.8 billion. BofA said the growth was mainly driven by a $15.2 billion drop in litigation expenses, partially offset by a drop in net interest income, higher provision for credit losses and lower revenue. Total assets, meanwhile, increased a modest $39.8 billion to $2.1 trillion at the end of the year, helped by an increase in loans driven by strong commercial demand, which outpaced consumer loan sales.
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