In this post, we will present revenues and profits analysis of Dow Jones Industrial Average (DJIA) index companies, or simply the Dow 30 companies for the years 2011 to 2015. Firstly, we will provide information on Dow 30 companies. Then, we will present the charts for the combined revenues and profits of Dow 30 companies. Then, we will provide revenues and profits related information of individual Dow 30 companies.
About Dow 30 Companies
Dow Jones Industrials Average (DJIA) or the Dow 30 is a stock market index that shows how 30 large publicly owned companies in the United States (US) are trading in the stock market. The Dow 30 consists of companies across sectors. The components of the index has changed several times, since its creation in 1896. As of April 24, 2016, the Dow 30 consisted of the following companies: 3M, American Express, Apple, Boeing, Caterpillar, Chevron, Cisco Systems, Coca-Cola, E.I. DuPont de Nemours, ExxonMobil, General Electric (GE), Goldman Sachs, Home Depot, Intel, IBM, JPMorgan Chase, Johnson & Johnson (J&J), McDonald's, Merck, Microsoft, NIKE, Pfizer, Procter & Gamble (P&G), Travelers, United Technologies, UnitedHealth Group, Verizon Communications, Visa, Walmart, Walt Disney.
The Dow 30 companies had a combined market capitalization of $5.4 trillion on April 24, 2015. This is more than the market cap of all the listed companies in any stock market exchange in the world. This is also more than the GDP (Gross Domestic Product) of all the countries in the world, except US and China.
At R&P Research, almost six months back, we started working on a project on ‘How Dow 30 Companies Make Money?’. This is to better understand and analyze the individual Dow 30 companies. In this post, we will present a combined analysis of these companies.
The Total Revenues And Profits Of Dow 30 Companies Declined Sharply In 2015
2015 was a bad year for many Dow 30 companies. Our analysis shows a sharp decline in the total revenue growth of Dow 30 companies in 2015. We combined the revenues of the Dow 30 companies to observe how the total revenues were growing. The combined revenues of Dow 30 companies were $2.7 trillion in 2015. They declined sharply by -5.2% year-over-year in 2015.
After the combined revenues analysis, we also did a combined profitability analysis of Dow 30 companies. We combined the net profits of the Dow 30 companies and then observed how the total net profits were growing. The combined net profits declined even more sharply than the revenues. The combined net profits declined by -17.2% year-over-year in 2015.
2015 Revenues Of Dow 30 companies
The chart below presents the 2015 revenues of the individual Dow 30 companies. Walmart leads the pack with $482 billion in revenues. The smallest company in Dow 30 companies in terms of revenues is Visa. Its 2015 revenues were $14 billion.
The following chart presents the 2015 year-over-year revenue growth of the individual Dow 30 companies. 11 of the 30 companies had a positive revenue growth and the remaining 19 had a negative revenue growth in 2015. Apple was the revenue growth leader in 2015 with 28% YoY growth. The largest revenue de-growth was seen in the Oil & Gas sector, with ExxonMobil and Chevron revenues declining by 34% and 35% YoY respectively. Their strong revenue de-growth has to do with the weakness in the global crude oil prices in 2015.
2015 Profits Of Dow 30 Companies
The chart below presents the 2015 net profits for the individual Dow 30 companies. Apple leads the pack with $53 billion in net profits. General Electric (GE) is the only company reporting a net loss in 2015. GE reported a net loss of $6 billion in 2015.
The following chart presents the 2015 year-over-year net profits growth of the individual Dow 30 companies. Again, 11 of the 30 companies had a positive net profits growth and the remaining had a negative net profits growth in 2015. Verizon was the net profit growth leader in 2015 with 86% YoY growth. The net profits of 10 of the 30 companies declined by more than 20% YoY.
- In the charts above, the latest available fiscal year (FY) numbers were presented. Fiscal year for 21 of 30 Dow companies ends on December 31. So, their 2015 numbers are presented. For the rest, the following numbers are presented: Walmart and Home Depot - FY ending January 2016; Apple, Disney, and Visa - FY ending September 2015; Cisco - FY ending July 2015; Microsoft and Procter & Gamble - FY ending June 2015; Nike - FY ending May 2015.
- The combined analysis charts are not ideal. This is because the fiscal year does not end in December for nine of the 30 companies. However, it does not matter much because the purpose of these charts is to show the overall trend. Making adjustment for one or two quarters of revenues or profits of the companies won’t impact the overall trend. The fiscal year numbers are chosen for analysis because they are readily available and most people can easily relate to these numbers. If we exclude the nine companies whose fiscal year does not end in December and do the combined analysis of the remaining 21 companies, the decline was even more sharper. The combined revenues of 21 of 30 companies (whose FY ends December 31, 2015), declined by -11.7% and combined profits declined by -27.5%.
- For companies in the Financials sector - Goldman Sachs, American Express, and JP Morgan Chase - the revenues are net of interest expenses.