It's Hard To Find The Losers

1995 was a year of spectacular gains in market values

In most years, a 20% hike in market value would earn any company the right to celebrate. But in 1995, that wasn't the case. Altogether, the companies on the BUSINESS WEEK 1000 enjoyed a chart-breaking market value gain of 35%. Their combined profits rose 15%, to $308 billion, on sales up 12%, to $4.9 trillion.

In 1995, the market gave Corporate America a pat on the back--and threw in a handshake, too. With gross domestic product growth up just 1.4%, investors lauded companies able to flourish in a softly landing economy. The tables that follow provide a detailed look both at how America's most valuable companies fared last year and an appraisal of their prospects. Since the list ranks companies by market capitalization, it's a measure of the future expectations of investors.

STILL TOPS. The list also offers many other useful statistics. Besides market value, it contains sales, profits, assets, and earnings per share. Stock prices, price-to-earnings multiples, dividends, total return, and analysts' estimates are all there for the perusing.

Where do investors see the hottest prospects? For the second year in a row, computer software and services was the top gainer among industries, adding a stunning $125 billion in value. At the forefront: Microsoft Corp. Revved up by the launch of Windows 95, both earnings, at $1.8 billion, and sales, at $7.4 billion, rose 41%. The Seattle giant's ability to stay a step ahead, even as the Internet roiled the software market, helped boost its market value 59%, to $58 billion. Other Net gainers included Sun Microsystems Inc., which surged from No.327 to No.127, and newcomer Netscape Communications Corp. at No.323.

Still, not every tech company rode the wave. Once-beloved Novell Inc. and Apple Computer Inc. crashed to earth, losing $3.1 billion and $1.4 billion in market value, respectively. Apple fell from No.208 to No.359 on fourth-quarter losses and sliding market share. Novell continued to lose out to Microsoft, falling from No.122 to No.287.

There was plenty of hot action in other industries, too. Price increases and strong new products helped drugmakers such as Johnson & Johnson. Its market value soared 66%, to $60.6 billion, as it moved from No.12 to No.8. Signs of improvement in PepsiCo Inc.'s long-struggling restaurant operations helped push its market value up 61%, to $50 billion, jumping it from No.21 to No.12. Boeing Co.'s market value rose 77%, to $28 billion, moving it from No.51 to No.38 as it rang up $31.2 billion in new plane orders. And in the recovering airline industry, shutting money-losing routes sent Continental Airlines Inc's market value up 467%, to $1.3 billion.

Surprises also came from companies that aren't so well known. U.S. Robotics Inc., a maker of modems and related equipment, roared up the list to No.246, with an outstanding 725% runup in market value, to $5.3 billion. And Republic Industries Inc., the latest vehicle of former Blockbuster Entertainment Group Chief Executive and Chairman H. Wayne Huizenga, entered at No.532 after the waste collector's market value swelled 2,384%, to $2.2 billion. No.149, Boston Scientific Corp., was another notable. The value of the company, which makes medical devices, rose 296%, to $8.3 billion, on a series of acquisitions.

LEFT AT HOME. A few companies weren't invited to the party. Investors fled from such cyclical industries as paper, textiles, and forest products. The market value of Georgia-Pacific Corp. dropped 15%, to $5.8 billion, despite the company's 212% profit increase, on economic jitters. Nucor Corp.'s value fell 4%, to $4.7 billion, as declining steel prices appeared to signal that demand was weakening. DuPont Co. and Dow Chemical Co. also were laggards, with measly 11% and 8% gains, respectively.

Meanwhile, overcapacity and stingy consumers gave retailers three of the largest losers of market value: Wal-Mart Stores, Kmart, and Toys `R' Us. Yet in 1995, these unhappy campers were the exceptions.

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