Thirteen local companies on Fortune 500 list

The raging fuel costs that enveloped the economy a year ago helped reshuffle companies on the latest Fortune 500, including some of the local powerhouses whose rankings rose on the list released yesterday.

Philadelphia oil refiner Sunoco Inc. and King of Prussia natural gas distributor UGI Corp. recorded the highest percentage revenue increases of the 13 locally based companies on the annual list. The much-coveted rankings are more a stamp of prestige than affirmation of a company's financial health.

Sunoco and UGI were among the 12 corporations whose standings improved from the prior year as even non-energy companies fared well, including the ever-ballooning telecommunications giant Comcast Corp.

But leading the local companies on the Fortune 500 list was $71-billion pharmaceutical product wholesaler AmerisourceBergen of Chesterbrook, which supplies medicines to hospitals, cancer physicians, and retail pharmacies. Its ranking increased two spots to 26th, putting it ahead of all other companies with headquarters in southeastern Pennsylvania and South Jersey.

"It's nice to be recognized for the revenue," said company spokesman Michael N. Kilpatric. "But what's more important is our ability to operate on razor-thin [profit] margins and take costs out of the health-care supply chain."

Some of the big movers were energy companies, whose revenues ballooned as the cost of commodities reached record highs a year ago.

Nationally, petroleum giant Exxon Mobil Corp. unseated retailer Wal-Mart Stores Inc. from the No. 1 ranking, for this reason.

"I see movement year over year based on what's going on in the economy," said Patrick Maggitti, assistant professor of strategic management and entrepreneurship at the Villanova School of Business. "When oil prices are up, for example, you'll see companies like Exxon at the top."

Sunoco's sales increased 22.7 percent, lifting it to 41st from 56 the prior year. UGI's revenue went up 21.4 percent last year over 2007, boosting it to a 377 ranking. It had been at 437 a year earlier.

Both companies said their revenue soared, in part, because the products they sell were more expensive, thanks to the rise in commodities costs.

"The increase in revenue can be attributed to one factor only, and that's crude oil prices," said Thomas Golembeski, spokesman for the $51.7-billion Sunoco.

"Increase in commodity costs and pricing certainly was a contributor to increased revenues," said John Walsh, president and chief operating officer UGI, whose revenue reached $6.6 billion in 2008.

Both companies were measured in their glee about the Fortune ranking.

"But it really is just a list," Sunoco's Golembeski said, "and it doesn't really reflect some of the challenges that we face in our industry right now and that we see in the foreseeable future."

Indeed, the list does not convey profitability. Nationally, General Motors Corp. ranked sixth, despite now teetering on bankruptcy. And Sunoco's profit fell in 2008 to $776 million from $891 million in 2007, Golembeski said.

The Fortune 500 is a "market-based signal of power," said Villanova's Maggitti, but with limitations. "That doesn't necessarily mean very much if you're inefficient and unable to be profitable," he said.

In Sunoco's case, the market for refined petroleum products is becoming more competitive - among the challenges on the horizon.

Comcast senior vice president D'Arcy Rudnay said it was "nice" for the Philadelphia cable TV, Internet, and phone company to move up on the Fortune list. The company reached the $34.3-billion mark by adding more customers, especially for broadband, she said.

"We had an increase in Internet subscribers; we had an increase in our digital phone subscribers, so in fact we're now the third largest phone company in America," Rudnay said.

She said she did not exactly know how much rate hikes may have also contributed to the company's growth.

Home builder Toll Brothers was displaced from the list, dropping to 667th place from 495th a year ago.