Here’s Why These 15 Companies Fell Off the Fortune 500

Jun 07, 2017

Last year was a decent year for corporate earnings, and a great year for the stock market. But there were still plenty of companies—15, to be exact—that lost their places on the Fortune 500.

The majority of the companies that left the list this year fell off as a result of the prolonged oil glut, which has clobbered revenues for energy companies. (The Fortune 500 ranks companies by annual revenue.) Though it has rallied from lows it hit in early 2016, the price of crude oil is down 56% since mid-2014, trading at about $48 a barrel in June 2017.

That said, things could have been worse: In 2015, 29 companies dropped off the Fortune 500 list. Here are the 15 that fell off in 2016, listed in order of where they appeared on last year's list.

1. KKR
Fortune 1000 Rank: 656
Last Appearance: 347
One-Year Revenue Change: -55.6%

A private equity firm specializing in leveraged buyouts, KKR earned some $5.5 billion from its investments in 2015, but that figure dropped to $109 million in 2016. That was partly due to a poor-performing bet in an energy exploration company, Samson Resources, and a slide in the value of KKR's shares of payment-tech company First Data Corp after a volatile start to 2016.

2. Hess
Fortune 1000 Rank: 525
Last Appearance: 394
One-Year Revenue Change: -26.3%

A petroleum refiner, Hess has not escaped the consequences of the oil glut. As the price of the commodity slid in 2016, so did Hess's revenue, which fell to $4.8 billion and knocked Hess down by 131 positions on the Fortune 500. A glimmer of good news: by the final quarter of 2016, oil prices were beginning to rebound, pushing the company's average realized crude selling price up 4.9%, to $45.97 a barrel.

3. Trinity Industries
Fortune 1000 Rank: 539
Last Appearance: 407
One-Year revenue Change: -28.2%

Trinity, which operates railway and construction businesses, reported that its revenue had fallen to $4.5 billion in 2016, due primarily to lower demand for transportation via its railcars and inland barges. Trinity largely transports chemicals, petroleum, coal, sand, and other industrial cargo. The company posted profits of $38.4 million last year, down 57% from a year earlier.

4. FMC Technologies
Fortune 1000 Rank: 543
Last Appearance: 410
One-Year Revenue Change: -28.6%

Yet another company exposed to the energy sector, FMC Technologies sells oil exploration and extraction equipment. BFMC Technologies' revenue fell to $4.7 billion, and it earned profit of $54.8 million, down 90% from a year earlier.

5. Commercial Metals
Fortune 1000 Rank: 535
Last Appearance: 417
One-Year Revenue Change: -24.5%

Commercial Metals, which processes scrap metal and steel, reported a decrease in sales of about $1.4 billion from the year before, resulting in revenue of $4.6 billion. Blame (you guessed it) the low price of oil. As oil extraction and exploration slowed, as did demand for scrap metal.

6. Barnes & Noble
Fortune 1000 Rank: 555
Last Appearance: 427
One-Year Revenue Change: -27.5%

The only retailer this year to fall off the Fortune 500, the brick-and-mortar bookstore seems to belong to a dying breed. Pressured by online booksellers with larger selections and a larger, established base (primarily Amazon), Barnes & Noble's revenue fell to $4.4 billion in 2016.

7. Marathon Oil
Fortune 1000 Rank: 536
Last Appearance: 438
One-Year Revenue Change: -20.7%

An oil company with international facilities, Marathon Oil couldn't maintain profitability in 2016, with a loss of $2.1 billion on revenue of $4.6 billion. Hit hard by falling oil prices, Marathon resorted to divesting assets,

8. Peabody Energy
Fortune 1000 Rank: 533
Last Appearance: 458
One-Year Revenue Change: -15.9%

Peabody Energy, the nation's biggest coal producer, has been on a gradual slide down the Fortune 500 over the past few years, as falling demand for coal hit it hard. Coal prices in general were driven even lower in 2016 due to low natural gas prices and warmer-than-usual winter temperatures that cut down demand for coal as an electricity generator, according to the U.S. Energy Information Administration.

9. Visteon
Fortune 1000 Rank: 693
Last Appearance: 470
One-Year Revenue Change: -41.1%

Automotive electronics supplier Visteon's revenue fell to $3.2 billion in 2016, largely due to the company selling off its interiors-production facility in Germany in late 2015.

10. Ashland Global Holdings
Fortune 1000 Rank: 516
Last Appearance: 472
One-Year Revenue Change: -8.1%

Ashland Global Holdings, which produces industrial chemicals, reported revenue of $5 billion in 2016. The results came in lower than the year before partly due to a stronger dollar. The company has also recently made some divestitures, including the spinoff of motor oil maker Valvoline, which was completed in 2017.

11. NiSource
Fortune 1000 Rank: 545
Last Appearance: 483
One-Year Revenue Change: -15.4%

A utilities company focused on natural gas, NiSource's revenue fell to $4.5 billion in 2016 after splitting off a significant portion of its business, Columbia Pipeline Group, into a separate entity the year before. Warmer-than-usual weather also helped depressed demand last year.

12. Domtar
Fortune 1000 Rank: 505
Last Appearance: 489
One-Year Revenue Change: -3.2%

Paper distributor Domtar reported sales of $5.1 billion for 2016, as the net average selling price for pulp and paper fell from a year earlier.

13. Spectra Energy
Fortune 1000 Rank: 519
Last Appearance: 493
One-Year Revenue Change: -6.1%

Natural gas company Spectra also reported a drop in revenue, to $4.9 billion. Like its peer NiSource, Spectra had trouble drumming up demand for heating fuel. The lower Canadian dollar also hurt the company by making its exports less attractive.

14. Navient
Fortune 1000 Rank: 514
Last Appearance: 494
One-Year Revenue Change: -4.5%

Student loan company Navient reported revenue of $5 billion in 2016 as it faced regulatory scrutiny. The U.S. Consumer Financial Protection Bureau alleged that the company had encouraged struggling borrowers to take on forbearance agreements rather than income-driven repayment plans, effectively putting its own interests ahead of its customers.

15. Telephone & Data Systems
Fortune 1000 Rank: 504
Last Appearance: 496
One-Year Revenue Change: -1.4%

A telecommunications company, Telephone & Data Systems reported revenue of $5.1 billion for the year largely due to decreases in a key metric—the average revenue billed per user. Lower roaming rates also pressed down revenue.

Editor's note: This story has been updated to more fully reflect the reasons for NiSource's revenue declines.

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