THE TIMES 100 : The Best Performing Companies in California : The Giants : Powerful Firms Get Stronger as Sales Beef Up

Are some of California’s largest companies hamstrung by their own bureaucracies? Will buyout and junk bond debts, especially amid a recession, keep tripping up corporate giants? Is small business taking over as the powerhouse in today’s economy?

To some extent, the answer is yes on all counts. But before getting carried away with what that means for the state’s business titans, don’t overlook one indisputable fact: California’s big companies, generally speaking, got even bigger last year--and some grew considerably.

That surprising pattern shows up on The Times’ Sales 100 list, a roster of the biggest publicly held companies in California in terms of 1990 revenues, as compiled by MZ Group of San Francisco. Overall, the top 100 companies posted revenue of $386.3 billion, up 10.5% from what they reported for 1989. The gain outpaced 1990’s moderate inflation rate of about 6% and the 6.4% overall sales increase for the Fortune 500 industrial corporations. It also came despite the onset of recession, the exodus of four major corporations from California and the departure of two previous Sales 100 savings and loans from the list because they filed for Chapter 11 bankruptcy protection.

Joseph A. Wahed, chief economist for Wells Fargo Bank in San Francisco, surmised that The Sales 100’s performance was linked to the diversity of California’s economy. The state’s big service companies, for example, generally are more recession-resistant than the Fortune 500 industrial juggernauts.

Wahed also cited the strong export business enjoyed by many of the state’s big companies and the relatively late arrival of the recession here. By some measures, he said, the recession still hasn’t hit California as hard as other parts of the country.

For instance, Wahed noted, although the nation lost 206,000 non-agricultural jobs in March, California lost only 8,300 of its 12.9 million non-agricultural jobs.

The state’s unemployment rate, at 7.7% in March, exceeds the national level of 6.8%, but Wahed blamed that on population growth spurred by California’s economic promise.

“California has a little more luck than the other states,” he said.

Not that California’s top corporations escaped hard times. Profits for the 100 biggest companies totaled $15.1 billion, down 2.4% from the year before. Still, the Fortune 500’s profits fell much more sharply, 11.7%.

The California trends were exaggerated somewhat by the results of the state’s top energy concerns, including the state’s three biggest public companies: Chevron Corp., Occidental Petroleum and Atlantic Richfield. Leaving out the energy sector, revenue of California’s biggest companies climbed a more modest 7.1% in 1990, while profits edged down only 0.2%.

Nine newcomers joined The Sales 100 roster in 1990. The biggest splash was made by Oakland-based Safeway, the supermarket chain.

It became eligible for the list by returning to public ownership through a stock offering last April, and it shook up the state’s top corporate rankings by finishing in fourth place. Also arriving on The Sales 100 because of public stock offerings were Foundation Health Corp., a Rancho Cordova-based operator of health maintenance organizations, and Pinkerton’s Inc. of Van Nuys, the security and investigative services firm.

Several companies catapulted onto The Sales 100 through acquisitions: Pathe Communications, which took over MGM/UA Communications; Broad Inc., the financial services firm, snapped up much of Integrated Resources; Maxtor Corp. bought another disk drive maker, Miniscribe Corp., and Live Entertainment, which boosted its size in the videocassette and record distribution business with purchases.

Three other newcomers were propelled simply by their own business growth: Quantum Corp. of Milpitas, a disk drive maker; Los Angeles-based builder Kaufman & Broad Home Corp., and Marshall Industries of El Monte, a distributor of electronics and industrial products.

The departures from The Sales 100 included MGM/UA and another major entertainment company acquired by a foreign buyer, MCA, now owned by Japan’s Matsushita. MCA, which ranked as California’s 32nd-biggest company in 1989, was the biggest concern that failed to rejoin The Sales 100 in 1990.

Four firms simply packed up their headquarters and left the state. Hospital operator American Medical International went to Dallas, and Maxxam Inc., the aluminum and forest products company, relocated to Houston. Nursing care home operator Beverly Enterprises moved to Ft. Smith, Ark., and oil refiner Tosco Corp. headed to Stamford, Conn.

The two S&Ls; that came off the roster because of bankruptcy filings were Columbia Savings and Imperial Corp.

Calmat Co., a producer of construction materials, also dropped off The Sales 100 list. As the construction business slowed, so did its revenue, and it sold off its cement subsidiary.

Among industry groups, only savings and loans reported declining revenues. Staggered by a weak real estate market, the overall revenue of the S&Ls; in The Sales 100 fell 1.3% to $20.4 billion. The bottom line was worse: The big S&Ls; lost a total of $25 million last year after making $428 million in 1989.

Energy companies, particularly those with big oil exploration operations, scored the biggest gain in revenues. Overall, revenue climbed 22.8% to $92.8 billion, largely because of oil price increases sparked by the Persian Gulf crisis.

Chevron, the state’s biggest publicly held company, was the biggest beneficiary, but Atlantic Richfield and Unocal Exploration Corp. showed substantial double-digit gains as well. All the same, profit for the energy companies was off 11.4%, dragged down by a loss of $1.7 billion at Occidental Petroleum, which embarked on a massive restructuring.

The high-tech electronics, computer products and services field was the best represented on The Sales 100, with 19 companies. Revenue totaled $44.8 billion, up 15.9%, while profit climbed 6.8% to $2.6 billion.

THE SALES 100

Ranks companies by overall revenue

1990 ’89 sales % chg. Rank rank Company ($ millions) from ’89 1 1 Chevron Corp. 41,540.0 41 2 2 Occidental Petroleum 21,694.0 8 3 3 Atlantic Richfield Co. 18,008.0 17 4 Safeway Inc. 14,873.6 4 5 5 Hewlett-Packard Co.* 13,233.0 11 6 4 Rockwell Intl. Corp.* 12,378.7 -1 7 6 BankAmerica Corp. 12,323.0 8 8 7 Unocal Corp. 10,645.0 6 9 8 Security Pacific Corp. 10,327.4 3 10 9 Lockheed Corp. 9,958.0 1 11 10 Pacific Telesis Group 9,716.0 1 12 11 Pacific Gas & Electric 9,470.1 10 13 12 McKesson Corp.* 8,336.7 7 14 17 Fluor Corp.* 7,446.3 19 15 13 SCEcorp 7,198.5 4 16 15 Pacific Enterprises 6,923.0 2 17 14 Transamerica Corp. 6,703.1 -2 18 16 First Interstate Bancorp 6,024.3 -8 19 18 Wells Fargo & Co. 5,959.8 6 20 24 Walt Disney Co.* 5,843.7 27 21 19 Apple Computer Inc.* 5,558.4 5 22 20 Northrop Corp. 5,489.8 5 23 23 Price Co.* 5,412.3 8 24 21 Vons Cos. 5,333.9 2 25 22 Litton Industries Inc.* 5,156.4 3 26 25 H.F. Ahmanson & Co. 4,788.3 9 27 27 Bergen Brunswig Corp.* 4,442.3 13 28 28 Great Western Financial 4,211.9 9 29 29 Consol. Freightways 4,208.5 12 30 33 Intel Corp. 3,921.3 25 31 26 National Medical Enter.* 3,741.8 -5 32 31 Times Mirror Co. 3,620.5 4 33 30 Teledyne Inc. 3,445.8 -2 34 37 Castle & Cooke Inc. 3,003.2 11 35 35 Carter Hawley Hale* 2,982.8 3 36 48 Avery Dennison Corp. 2,590.2 50 37 38 Glenfed Inc.* 2,573.2 -1 38 47 Sun Microsystems Inc.* 2,466.2 40 39 59 Seagate Technology* 2,413.2 76 40 40 American President 2,269.9 -1 41 41 Longs Drug Stores Inc.* 2,257.4 7 42 34 Calfed Inc. 2,163.8 -30 43 43 Amdahl Corp. 2,158.8 3 44 45 Golden West Financial 2,127.2 10 45 46 Homefed Corp. 1,875.0 -1 46 50 Tandem Computers Inc.* 1,865.9 14 47 52 Gap Inc.* 1,854.2 17 48 44 SDG&E; 1,771.9 -15 49 51 Natl. Semiconductor* 1,730.7 3 50 49 Union Bank 1,686.4 2 51 55 Computer Sciences* 1,679.3 12 52 53 Great Amer. Bank 1,543.8 -3 53 61 Syntex Corp.* 1,521.0 13 54 54 Fleetwood Enterprises* 1,517.7 -2 55 60 Clorox Co.* 1,484.0 9 56 63 Mattel Inc. 1,470.6 19 57 57 Rykoff-Sexton Inc.* 1,445.5 3 58 65 Kaufman & Broad* 1,366.3 8 59 68 Businessland Inc.* 1,353.6 14 60 87 Conner Peripherals 1,337.6 90 61 67 First Executive Corp. 1,296.5 9 62 62 Varian Associates Inc.* 1,264.8 -6 63 64 Potlatch Corp. 1,252.9 2 64 85 Intermark Inc.* ** 1,229.8 32 65 94 Merisel Inc. 1,192.4 89 66 70 Raychem Corp.* 1,114.7 3 67 66 Coast Savings Finl. 1,087.6 -11 68 76 Hilton Hotels Corp. 1,087.1 14 69 72 Rohr Industries* 1,078.7 3 70 73 Western Digital Corp.* 1,070.5 8 71 69 Advanced Micro Devices 1,059.2 -4 72 83 Oracle Systems Corp.* 1,058.9 9 73 75 Magnetek Inc.* 1,055.4 10 74 74 First Capital Holdings 980.7 1 75 90 FHP International Corp.* 980.4 40 76 92 Pacificare Health* 969.7 50 77 84 Unocal Exploration 912.6 35 78 95 L.A. Gear Inc.* 902.2 46 79 Foundation Health* 895.2 17 80 79 Allergan Inc. 883.9 10 81 81 Jacobs Engineering* 881.8 11 82 77 Caesars World* 870.2 -4 83 80 Guy F. Atkinson Co. 866.0 9 84 Broad Inc.* 817.6 51 85 82 Beckman Instruments 815.2 4 86 88 20th Century Industries 799.6 14 87 Maxtor Corp.* 789.4 61 88 86 Ross Stores Inc.* 777.1 6 89 Pathe Commun.* ** 766.8 119 90 Live Entertainment 742.5 70 91 Quantum Corp.* 716.3 60 92 89 First Amer. Finl. Corp. 707.8 1 93 93 Amer. Building Maint.* 679.1 6 94 96 Adia Services Inc. 666.2 10 95 99 LSI Logic Corp. 655.5 20 96 97 Charles Schwab Corp. 625.9 13 97 100 Argonaut Group Inc. 611.0 31 98 98 Collins Foods Intl.* 593.6 6 99 Pinkerton’s Inc. 583.6 -4 100 Marshall Industries* 581.7 7

* See exceptions, page 55.

** See company notes, page 55.

Source: MZ Group. Certain historical data is from Standard & Poor’s Compustat Inc.