In this article, we will be taking a look at the 25 most profitable companies in the world. To skip our detailed analysis, you can go directly to see the 5 most profitable companies in the world.
There is a great divide in the finance world between revenue, growth and profit. Often times, the focus is on companies who either have already demonstrated significant, or in most cases, companies which have the potential for massive growth in the future, as that will lead to a greater valuation and hence, a greater return for shareholders. Growth here refers to revenue growth and often, targets are set based on expected revenue in the future based on various analytics and data. When a company is newly incorporated with great potential, even though revenue continues to increase significantly year on year, it is generally loss making except in some specific circumstances, due to a lack of economies of scale and high fixed costs and capital investment. Therefore, at this juncture, it is generally the gross margin, or revenue less cost of goods sold, which show the variable profit of a company, which is considered to be an important metric, even though revenue growth is still perhaps the most important factor at this stage.
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However, for shareholders of major companies, both public and profit, net profit is one of the most important metrics to consider, which shows the profit of a company after all expenses have been deducted, including both variable and fixed costs, not to mention other expenses such as interest, tax, depreciation and amortization. Net profit is what goes to shareholders in the form of dividends, though the majority of their return comes from an increase in the value of the company.
One amazing example of a company focusing on growth instead of revenue early on, and which was one of the most profitable companies in the world according to Forbes Global 2000, is Amazon.com, Inc. (NASDAQ:AMZN). When Amazon.com, Inc. (NASDAQ:AMZN) started out, for several years, it was a lossmaking company even as its revenue saw outstanding growth and the company dominated the online retailer industry. The company adopted a policy of providing extremely low prices to attract customers and driving out competitors while hemorrhaging money, as losses continued to pile up. It took Amazon.com, Inc. (NASDAQ:AMZN) 14 years to make as much profit as it did finally in the last quarter in 2018. Now, it is easily one of the biggest companies in the world as its dominance only continues to improve, with Jeff Bezos’s policy of growth over meeting quarterly earnings targets achieved great success in the long term. Many other companies, though, are not so lucky, as consistently making losses is not generally a viable strategy long term.
However, in this ever-advancing world, profit is no longer the only important consideration for shareholder; environmental, social and governance (ESG) has made its mark, which is why some of the most profitable companies in the world also have a lot in common with the biggest ESG companies in the world. Considering the negative impacts major companies have on the environment and climate change, there has been significant backlash against their practices, which is why companies have had to focus more on sustainability in addition to profits, and make significant investments to bring to fruition their ambitious ESG targets. While ESG was initiated decades ago, the world has started taking it much more seriously now, since the impact of climate change isn’t just known, but is being felt across the world.
To determine the most profitable companies in the world was not an easy task. To start off, we obtained profits on the top 2000 companies in the world courtesy of Forbes. We then filtered the 50 companies with the highest profits, and updated the profit figures based on the trailing twelve month profits from Yahoo Finance. Remember, even though some of them may have made losses recently, they are traditionally among the most profitable companies in this world, and hence, deserving of a place in this list. We have also only focused on net income from continuing operations to truly reflect a company’s profitability. Some energy companies, as a result of the Russia Ukraine war and the increase in energy prices, have recorded their best ever profits in history and hence, jumped several places in this list. So, let’s take a look at the companies which combined reported profits of well over $950 billion, starting with (all TTM net profit figures are in millions):
25. LVMH Moët Hennessy – Louis Vuitton
Total TTM net profit from continuing operations of the company: $14,084
LVMH Moët Hennessy – Louis Vuitton is a luxury goods company among the biggest of its kind in the world, which has made its owner Bernard Arnault the richest person in the entire world.
24. The Procter & Gamble Company (NYSE:PG)
Total TTM net profit from continuing operations of the company: $14,279
One of the largest FMCG companies in the world, The Procter & Gamble Company (NYSE:PG) has around 65 brands, many of which are well-known and contributed to its revenue of more than $80 billion in 2022.
23. Merck & Co., Inc. (NYSE:MRK)
Total TTM net profit from continuing operations of the company: $14,519
There are plenty of pharmaceutical companies among the most profitable companies in the world, and Merck & Co., Inc. (NYSE:MRK) is no exception, which recorded revenues of nearly $43 billion in 2022.
22. Visa Inc. (NYSE:V)
Total TTM net profit from continuing operations of the company: $15,177
One of the largest finance companies in the world, Visa Inc. (NYSE:V) recorded revenue of nearly $30 billion in 2022.
21. Roche Holding
Total TTM net profit from continuing operations of the company: $15,587
One of the large pharmaceutical companies in Europe, Roche has recently been accused by a sacked drug safety manager of widespread non-compliance in marketing materials distributed by its Irish arm, according to The Irish Times.
20. The Home Depot, Inc. (NYSE:HD)
Total TTM net profit from continuing operations of the company: $17,105
One of the largest retailers in the U.S., The Home Depot, Inc. (NYSE:HD) is getting ready for a consumer slowdown in 2023, as a recession threatens the U.S. economy.
19. Toyota Motor Corporation (NYSE:TM)
Total TTM net profit from continuing operations of the company: $17,826
Toyota Motor Corporation (NYSE:TM) is one of the largest car companies in the world by revenue. As prices in Japan continue to increase, Toyota Motor Corporation (NYSE:TM) registered its biggest pay increases in decades.
18. Johnson & Johnson (NYSE:JNJ)
Total TTM net profit from continuing operations of the company: $17,941
Johnson & Johnson (NYSE:JNJ), although among the largest pharmaceutical and consumer healthcare companies in the world, has been embroiled in several scandals regarding its practices, including losing a recent challenge to a judgment of $302 million over its marketing of pelvic mesh.
17. UnitedHealth Group Incorporated (NYSE:UNH)
Total TTM net profit from continuing operations of the company: $20,120
UnitedHealth Group Incorporated (NYSE:UNH) is one of the largest healthcare companies in the world and has close to 400,000 employees and is considered to be largest health insurance company in the world by net premiums.
16. Verizon Communications Inc. (NYSE:VZ)
Total TTM net profit from continuing operations of the company: $21,256
Verizon Communications Inc. (NYSE:VZ) is easily one of the most valuable telecom companies in the world, and is collaborating with KPMG to bring 5G to healthcare.
15. Meta Platforms, Inc. (NASDAQ:META)
Total TTM net profit from continuing operations of the company: $23,200
Even though Meta Platforms, Inc. (NASDAQ:META) has seen its share price plummet in 2022 in a devastating year for most tech stocks, it is still one of the most profitable companies in the world, even though the metaverse is now being met with extreme skepticism.
14. Tencent Holdings
Total TTM net profit from continuing operations of the company: $25,435
While it is the most profitable company in China , Tencent Holdings has recently scrapped its plans for VR hardware as betting on the metaverse is failing for several companies, even though it is one of the biggest metaverse companies in the world.
13. Bank of America Corporation (NYSE:BAC)
Total TTM net profit from continuing operations of the company: $27,528
Bank of America Corporation’s (NYSE:BAC) practices have been called into question continuously recently, having racked up over $1.2 billion in penalties and settlements in 2022 alone.
12. Pfizer Inc. (NYSE:PFE)
Total TTM net profit from continuing operations of the company: $31,366
One of the top drug companies in the world in 2022, Pfizer Inc. (NYSE:PFE) has been instrumental in enabling the world to get through the Covid-19 pandemic.
11. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Total TTM net profit from continuing operations of the company: $33,142
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), one of the largest semiconductor companies in the world by market cap, recently saw its share price plummet after Warren Buffett’s Berkshire Hathaway sold a stake in the company worth billions of dollars.
10. Chevron Corporation (NYSE:CVX)
Total TTM net profit from continuing operations of the company: $35,465
One of the largest oil companies in the world, Chevron Corporation (NYSE:CVX) needs to work more on its ESG impact, with recent news suggesting that Chevron Corporation’s (NYSE:CVX) biofuel plant is considered to be a cancer risk to nearby communities.
9. JPMorgan Chase & Co. (NYSE:JPM)
Total TTM net profit from continuing operations of the company: $37,676
The second most profitable bank in the world and the most profitable bank in the U.S., JPMorgan Chase & Co. (NYSE:JPM) is one of the most influential banks in the entire world.
8. Samsung Electronics
Total TTM net profit from continuing operations of the company: $41,625
Samsung Electronics is one of the most valuable companies in Korea and considered to be a giant in the electronics industry. It is one of the biggest cellphone and TV manufacturers in the world.
7. Shell plc (NYSE:SHEL)
Total TTM net profit from continuing operations of the company: $42,309
Shell plc (NYSE:SHEL) is one of multiple oil and gas companies to have recorded incredible profits as a result of the Russia Ukraine war. Recently, Shell plc (NYSE:SHEL) has been in the news for ignoring the risks of gas production in Groningen.
6. ICBC
Total TTM net profit from continuing operations of the company: $52,089
The Industrial and Commercial Bank of China is the most profitable bank in the entire world easily the biggest bank in the world with assets of over $4.8 trillion.
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Disclosure: None. 25 most profitable companies in the world is originally published at Insider Monkey.
