Even the biggest took some big bites

Collectively, the 100 local companies with the biggest market caps lost $108B in market value over the last year. The decline in Comcast Corp. shares accounted for one-quarter of that.

Big is certainly not beautiful during this Great Recession.

Having committed trillions of dollars to bailouts, we scorn the concept of "too big to fail." We worry about gargantuan financial firms that pose "systemic risk" to national economies. We second-guess our gas-guzzling cars, cavernous houses, and long commutes.

As the wheels fell off the U.S. economy in 2008, few of the Philadelphia region's biggest companies got bigger.

Thanks to a spectacular retreat in the stock market, most are worth less than they were a year ago.

The standard way to figure out what any public company is worth is to multiply the number of common shares outstanding by its stock price. The result is called a company's market value, or market capitalization, because it reflects what investors say they believe an enterprise is worth.

Like the tide, when the stock market rises or falls significantly, it lifts or lowers the values of public companies. The Standard & Poor's 500 index fell 34 percent over the 52 weeks ended May 29. So while it is a given that there was major leakage in corporate market caps, the amount of value destruction is staggering.

Collectively, the 100 companies in the Philadelphia region with the biggest market caps lost $108 billion in market value over the last year. The decline in Comcast Corp. shares accounted for one-quarter of that drop.

There are many new names on this year's list. Last year, a company needed to have a market value of at least $177 million to make the cut. This year, No. 100 is Broomall's Alliance Bancorp Inc. of Pennsylvania at $58.1 million.

Acquisitions removed some companies, including Rohm & Haas Co., Philadelphia Consolidated Holding Corp., and Ikon Office Solutions Inc.

They were scooped up in high-profile transactions struck before the September collapse of Lehman Bros. Holdings Inc. sent world markets into a panic.

Two companies simply lost so much value that they dropped off the list. Advanta Corp., a credit card marketer in Spring House that has struggled mightily, lost 92 percent of its market value over the last year. Radio-station operator Entercom Communications Corp., of Bala Cynwyd, lost 84 percent.

Some stock-price swoons were no less spectacular, but they did not result in the companies' dropping off the list. No. 95 Rait Financial Trust, which provides debt financing to the commercial real estate industry, lost 85 percent of its value, or $472 million.

And the market cap of Technitrol Inc., which makes components for electronics and electrical equipment, fell 84 percent, or $651 million. Quite a haircut, but it merely caused the Trevose company to slip to No. 78 from No. 56 in 2008.

The market values of 12 of the Top 100 companies rose over the last year. The biggest gain (172 percent) was experienced by Hemispherx Biopharma Inc. Starting in early May, the penny stock spiked higher on speculation that the Food and Drug Administration would approve the Philadelphia company's experimental Ampligen to treat chronic fatigue syndrome.

Here is how the region's five most valuable companies fared over the last year:

 

Comcast Corp.

Philadelphia

Founded in 1963

Chairman/CEO: Brian L. Roberts

Nasdaq: CMCSA

Employees: 100,000

Market cap: $39.08 billion

1-year change: down 41.2 percent

Few companies are as omnipresent as Comcast in the Philadelphia region.

One Comcast Center towers over Center City. It owns the Flyers and Sixers.

Whether or not you have Comcast cable, high-speed Internet, or phone service doesn't prevent the letter carrier from delivering a weekly direct-mail pitch.

But look beyond the 10-county area and you will see how far Comcast has sprawled. As of March 31, Comcast had 24.1 million video customers, 15.3 million high-speed Internet customers, and 6.8 million phone customers.

 

DuPont Co.

Wilmington

Founded in 1802

CEO: Ellen J. Kullman

NYSE: DD

Employees: 60,000

Market cap: $25.73 billion

1-year change: down 39.4 percent

As difficult as the last year has been for the world's chemical companies, DuPont continues to direct its resources into the areas it believes are the future: agriculture, biosciences, safety and protection, and polymers. DuPont spends about 5 percent of sales, or $1.4 billion on research and development annually. While the Wilmington area remains the company's main research center, DuPont now has more than 20 R&D operations outside the United States.

 

Campbell Soup Co.

Camden

Founded in 1869

President/CEO: Douglas R. Conant

NYSE: CPB

Employees: 19,400

Market cap: $9.80 billion

1-year change: down 22.2 percent

There's nothing like a recession to draw shoppers to the soup aisle.

But it would be a mistake to think Campbell Soup is merely a chicken-noodle company. It makes Pepperidge Farm Goldfish to toss in the bowl, V8 Splash drinks to wash it down, Prego pasta sauces, Pace salsas, and lots of other brands.

The company is even spending $90 million to expand its headquarters in Camden.

 

Tyco Electronics Ltd.

Berwyn

Founded in 1941

CEO: Thomas J. Lynch

NYSE: TEL

Employees: 96,000

Market cap: $7.96 billion

1-year change: down 57.9 percent

Of the region's biggest companies, Tyco Electronics is likely the most unfamiliar. It was spun off by the Tyco conglomerate in 2007. But its roots are largely in central Pennsylvania from a company called AMP Inc., which Tyco bought in 1999. Sales were down 27 percent for the first half of its current fiscal year. Tyco Electronics is also selling its wireless systems business unit for $675 million.

 

Cigna Corp.

Philadelphia

Founded in 1865

Chairman/CEO: H. Edward Hanway

NYSE: CI

Employees: 30,300

Market cap: $6.05 billion

1-year change: down 46.9 percent

As one of the nation's biggest health insurers, Cigna is more than an interested observer in whatever changes the Obama administration and Congress make to the nation's health-care system. Some experts speculate that the big health plans will have to get bigger in order to invest in the technology and talent needed to cope with the new realities. Cigna covers about 12 million people.

 


Contact Mike Armstrong at 215-854-2980 or marmstrong@ phillynews.com. See his blog at www.phillyinc.biz and Philadelphia Business Today webcast at www.philly.com/philly/business.

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