THE TIMES 100: THE BEST COMPANIES IN CALIFORNIA : REGIONAL PROFILES : L.A. COUNTY: THE ODD MIXTURE : Area Holds On to Its Claim as Finanical Center of West
Public schools are often failing to train American youth to enter labor markets, which explains in part why Encino-based United Education & Software was able to generate a 300% return to its shareholders in the past 16 months through its business of trade and vocational schools.
The average teen-age girl in the United States buys five pairs of athletic shoes every year--one reason why L.A. Gear has returned 198% to its shareholders and was ranked among the top stock performers in Los Angeles County last year.
C&R; Clothiers opened 20 stores last year on its way to taking a dominant position in selling men’s suits in Southern California, a business that returned 116% to shareholders.
These are three success stories among the top performing 25 companies based in Los Angeles County, measured by their total return to shareholders. The Times’ list of county companies with the best shareholder returns is an odd mixture of retailers, industrials and entertainment concerns that were either rapidly growing or recovering from slumps that had previously depressed their stock prices.
Los Angeles County accounted for five of the top 25 companies in the state measured by return to shareholders, a positive report for an industrial area seemingly characterized by mature industries, large financial institutions and a major service sector not always noted for performance.
The companies that scored the highest for their stockholders ranged from the 300% return at United Education to an impressive 62% return generated by 15th-ranked Caesars.
Although small companies accounted for the vast majority of the best performers, the day remains far off when the current list of top performing companies will be the powerhouses of the Los Angeles economy.
The largest companies, as measured by sales and market value, are the big oil, aerospace and entertainment companies that have dominated Los Angeles County for so long that they are part of the area’s cultural heritage.
The Times’ survey validates Los Angeles’ claim as the business and financial center of the West. Los Angeles-based firms account for five of the top 10 firms ranked by sales in the state, edging out San Francisco, which had four of the top 10. Palo Alto was headquarters for the 10th company.
In the rankings of headquarters from the 11th through 20th position, Los Angeles County accounted for six and San Francisco for three. The other position went to Dublin.
No. 1 on the county list, Occidental posted revenue of $17.1 billion, followed by Atlantic Richfield’s $16.3 billion, Lockheed’s $11.3 billion, Unocal’s $9.4 billion and Security Pacific’s $7.6 billion.
The ranking of the largest companies by sales is also notable for those firms not on the list, which include some of the most important players in the Los Angeles economy. Many big employers in the county are based elsewhere or are subsidiaries of companies with headquarters elsewhere.
In aerospace, for example, the largest companies ranked by sales do not include Hughes Aircraft with its $7 billion in 1987 sales, Rockwell International with $4 billion, Douglas Aircraft with $3.97 billion and TRW with $3.1 billion, based on California revenue estimates provided by the companies or taken from annual reports.
The Times’ survey ranks Lockheed, with 50,000 employees, as largest employer headquartered in the county. Northrop has 37,000; Carter Hawley Hale Stores, 25,000; Pacific Enterprises, 21,950, and Security Pacific, 21,950.
It is worth noting, however, some of the biggest employers, whose headquarters are elsewhere: Hughes (77,000 employees), Rockwell International (37,000), Douglas (33,000) and TRW (17,000). All would easily rank among the top 10 employers in the county.
In addition, these top four aerospace companies, along with Northrop, Lockheed, Litton Industries and Teledyne, are even more important in generating jobs and income when subcontracting activity is considered. Up to 75% of government contract dollars are often passed through to subcontractors, who never turn up on anybody’s list.
If corporate health is related to sales growth, it often seems to be an inverse relationship. The top companies ranked by sales growth include a number that have experienced operational or financial problems, including the top performer, New World Entertainment, a feature film producer, and the No. 2 performer, Maxicare Health Plans, a health-maintenance organization.
But the list also includes healthy performers, such as disk-drive manufacturer Micropolis, which earned $27.2 million on sales of $288.3 million, and the aircraft leasing firm International Lease Finance, which earned $47.5 million on revenue of $173.1 million. Ashton-Tate, the software development firm that was ranked eighth, earned $40.9 million on sales of $254.7 million.
A ranking of Los Angeles County firms by market value turns the listing around substantially, dropping aerospace firms out of the top 10 rankings and bringing up a sampling of other companies.
Lockheed, Litton Industries and Northrop--aerospace firms that have all encountered at least some negative investor reaction because of cuts in the federal defense budget--fall from the top 10 of The Times’ list when ranked by market value.
Alternatively, a market value listing adds such well-known concerns as Walt Disney, Times Mirror, Farmers Group and Teledyne in the top 10. Lower on the list, Hilton Hotels grabbed the 13th position and First Interstate the 15th.
LOS ANGELES COUNTY TOP 15 / REVENUE
1987 revenue % change Rank Company ($ millions) from 1986 1 Occidental Petroleum 17,096.0 11 2 Atlantic Richfield 16,282.0 12 3 Lockheed Corp. 11,321.0 10 4 Unocal 9,393.0 26 5 Security Pacific 7,617.5 27 6 Northrop 6,050.0 8 7 Southern Calif. Edison Co. 5,492.7 3 8 Pacific Enterprises 5,339.3 0 9 First Interstate Bancorp 5,079.5 -4 10 Litton Industries 4,419.7 -2 11 Great Western Financial 3,969.0 3 12 First Executive Corp. 3,481.7 -4 13 Wickes Cos. 3,476.9 -27 14 Vons Grocery Cos. 3,276.0 11 15 Teledyne 3,216.8 -1
LOS ANGELES COUNTY REVENUE GROWTH
2-year 1987 1987 compnd. rev. revenue income(loss) Rank Company growth % ($ millions) ($ millions) 1 New World Entertainment 90 384.3 (18.456) 2 Maxicare Health Plans 89 1,838.6 (255.9) 3 Magnetek 77 608.9 4.867 4 Micropolis 74 288.3 27.240 5 Rexon Inc. 74 101.4 6.184 6 Intl. Lease Finance Corp. 53 173.1 47.506 7 Countrywide Credit Ind. 46 141.9 16.332 8 Ashton-Tate 45 254.7 40.891 9 Sunrise Medical Inc. 44 140.8 0.850 10 Zenith National Insurance 41 459.7 41.103 11 Wherehouse Entertnmt. 39 266.8 2.968 12 Transtechnology 37 209.4 11.862 13 Neutrogena 35 135.1 14.893 14 Leisure Technology 34 157.2 6.708 15 Kaufman & Broad 29 1,518.0 60.567
LOS ANGELES COUNTY TOP STOCK PERFORMERS
Stock Stock Cash Total Price Price Divid. Rank Company Return 4/4/88 12/31/86 Paid 1 United Eductn. & Sftware 300 21.00 5.25 0.00 2 L.A. Gear 198 24.63 8.25 0.00 3 C&R; Clothiers 116 20.50 9.50 0.00 4 Calmat Co. 114 43.13 20.31 0.40 5 Jacobs Engineering Group 105 16.75 8.18 0.00 6 Telos Corp. 100 11.50 5.75 0.00 7 Neutrogena 94 32.75 16.94 0.07 8 Cetec 92 9.38 5.00 0.20 9 Pauley Petroleum 85 18.50 10.00 0.00 10 Hamburger Hamlets 83 8.25 4.50 0.00 11 Eldon Industries 69 21.63 12.90 0.20 12 Tiger Intl. 68 14.50 8.63 0.00 13 Cable TV Industries 65 3.50 2.13 0.00 14 Marshall Industries 63 16.25 10.00 0.00 15 Caesars New Jersey 62 16.63 10.25 0.00
LOS ANGELES COUNTY TOP 15 / MARKET VALUE
4/4/88 Market value Book value Market as Rank Company ($ millions) ($ millions) % of book 1 Atlantic Richfield 14,814.7 5,878.0 252 2 Walt Disney Co. 7,623.1 1,845.4 413 3 Southern Calif. Edison 6,595.2 5,665.7 116 4 Occidental Petroleum 5,479.0 5,177.0 106 5 Unocal 4,414.8 1,766.0 250 6 Times Mirror 4,306.4 1,454.2 296 7 Farmers Group 4,109.2 1,527.7 269 8 Teledyne 3,745.4 1,976.0 190 9 Security Pacific 3,244.6 3,363.0 96 10 MCA Inc. 3,199.3 1,557.6 205 11 Lockheed Corp. 2,861.5 2,087.0 137 12 Pacific Enterprises 2,705.0 1,721.7 157 13 Hilton Hotels 2,259.1 772.8 292 14 Litton Industries 2,101.5 1,053.8 199 15 First Interstate Bancorp 2,050.9 2,165.7 95
LOS ANGELES TOP 15 / ABSOLUTE PROFITS
Change 1987 income in income Rank Company ($ millions) ($ millions) 1 Atlantic Richfield 1,224.0 609.0 2 Southern California Edison Co. 788.6 20.0 3 Lockheed Corp. 436.0 28.0 4 Walt Disney Co. 392.3 145.0 5 Teledyne 377.2 138.9 6 Farmers Group 290.0 70.0 7 Times Mirror 266.5 (141.6) 8 Pacific Enterprises 224.6 164.8 9 Great Western Financial 210.1 (78.9) 10 H.F. Ahmanson & Co. 200.0 (103.6) 11 Occidental Petroleum 184.0 11.9 12 Unocal 181.0 5.0 13 First Executive Corp. 177.8 20.8 14 Argonaut Group 170.8 148.0 15 CalFed 166.9 2.2
* Includes other operating and non-operating revenue.
