America's 10 Most Profitable Companies

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It was a banner year for these Fortune 500 companies. Learn why their profits soared.

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America's 10 Most Profitable Companies
Fortune 500 rank: 2
2012 profit (millions): $44,880

The ink on Exxon Mobil's balance sheet comes in one grade: Premium. The energy giant fell just short of setting a company -- and world -- record for profits this year. The last world record was set by -- you guessed it -- Exxon Mobil, back in 2008. The abundance of cheaper domestic energy both hurt and helped the company in 2012. A greater supply of U.S. crude and natural gas drove production revenues down. But it was Exxon's refineries that saved the day. With supplies close at hand, making fuel was a lot cheaper, which helped boost profits.

Fortune 500 rank: 6
2012 profit (millions): $41,733

In its first year without Steve Jobs, Apple managed to climb a notch on our list of most profitable companies. How long it can stay there is another story. 2012 results were driven by the iPhone. In the fourth quarter alone, sales of the smartphone spiked 58% year over year. But sales growth for the iPad dropped, disappointing fanboys and investors used to blowout results. Meanwhile shares have dropped about 40% since September's all-time high on worries over demand, supply issues, shrinking profit margins, and the looming threat of rival Samsung and its Android-driven devices.

Fortune 500 rank: 3
2012 profit (millions): $26,179


 Like Exxon Mobil, Chevron relied on its refineries to hold up its bottom line in 2012. When oil prices were climbing, integrated energy companies were urged to dump their low-margin refining units. But Chevron and Exxon didn't listen, and when crude prices dropped, the hedge paid off. Profits at Chevron's U.S. downstream operations jumped by a third year over year on increased supply of domestic energy. That wasn't enough to keep overall profits from slipping, however, as big bets on upstream ops, like natural gas exploration, have yet to pay off.

Fortune 500 rank: 18
2012 profit (millions): $21,284

It was a year of records and reckoning for J.P. Morgan Chase. The bank's highest annual profit ever was tainted by the $6.2 billion "London Whale" trading loss on risky bets. The scandal also cut into CEO Jamie Dimon's bottom line when the board hit him with a 50% pay cut. But as Mr. Dimon likes to say: Life goes on. 2012 marked strong results across all of J.P. Morgan's units. Until interest rates finally rise from rock-bottom levels, however, the bank will continue to get pinched on the profit it makes off its loans.

Fortune 500 rank: 25
2012 profit (millions): $18,897

For the bank that provides a third of all U.S. mortgages, the housing recovery has been a boon. Wells Fargo posted record annual profits last year on the back of an industry-wide refi-renaissance. But in the final quarter of 2012, Wells rang a warning bell that the boom might be ending. Mortgage lending slowed for the first time in more than a year, and like J.P. Morgan, the bank continues to suffer from low interest rates. Wells Fargo's net interest margin -- a key measure that tracks loan profitability -- shrank in the quarter and continues to contract into 2013.

Fortune 500 rank: 12
2012 profit (millions): $17,220

If you're still not convinced the housing recovery is well under way, take a look at Fannie Mae. The mortgage financing giant posted record profits for 2012 on a sharp drop in foreclosures and delinquencies on the loans it owns or guarantees. That's quite the turnaround from four years ago, when the federal government had to take control after the housing bubble burst. Now that Fannie Mae is profitable, it's well on track to pay back the $116 billion Uncle Sam put up to bail the company out.

Fortune 500 rank: 1
2012 profit (millions): $16,999

The profit machine at the world's largest retailer continues to chug along. Walmart's net for 2012 climbed a respectable 8%, capped by a solid holiday shopping season at the end of the year. But the bellwether for consumer spending spooked market watchers when it warned of sluggish sales in the first quarter of 2013. Walmart said consumers are getting hit especially hard by higher payroll taxes and rising gasoline prices. Whether that hurts lower-income customers or drives more of them to the discount retailer remains to be seen.
Fortune 500 rank: 35
2012 profit (millions): $16,978

Reporting your first quarterly loss ever is not the way a company wants to end its fiscal year. But a bad bet on online ad unit aQuantive forced Microsoft to report a $6.2 billion writedown in its fourth-quarter results last June. The software giant has redeemed itself since then. Microsoft released Windows 8 last fall, and despite a dying PC market, sales jumped 23% last quarter. The company's smartphone and tablet offerings have yet to make a dent against their rivals, but with boosts from the Xbox and a move to cloud computing, Microsoft is growing again and meeting expectations.

Fortune 500 rank: 20
2012 profit (millions): $16,604

In her first year at the helm, Ginni Rometty steered IBM toward higher profits in 2012, despite a dip in sales. A long-term shift to higher-margin software and services has helped prop up results, but Big Blue faces tough revenue challenges amid continued weak corporate tech spending at home and abroad. Despite a weaker-than-expected showing in the first quarter of 2013, IBM is sticking by its full-year earnings guidance. But as sales continue to slide, the company has indicated job cuts to meet its goals.
Fortune 500 rank: 5
2012 profit (millions): $14,824
Perhaps no one was more disappointed with Berkshire Hathaway's 2012 results than Warren Buffett, who called his performance "subpar" in his annual letter to shareholders. Over the year, Berkshire's book value per share rose a substantial 14.4%. But that wasn't enough to beat the competition, i.e., the S&P 500, which rang in a 16% total return for 2012. Earnings per share jumped 44% from the year before, but Buffett prefers book value as the truer performance measure, because it includes all of Berkshire's capital gains, realized or unrealized.

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