What U.S. companies will earn the highest profits in 2011? We looked at the consensus profit estimates for America's largest corporations based on Bloomberg data and estimates from more than 50 analysts. Here is the list, which is dominated by oil, finance and technology companies. In the margin, we also think through some of the opportunities and challenges facing the most profitable companies in the world:
Forecasting corporate profits is not an exact science, and it's easier to do for some companies than others. For example, it is relatively normal for companies like Wal-Mart, which sells tens of thousand of products to tens of millions of people, to post earnings figures close to expectations. On the other hand, Apple earnings are based almost entirely on the revenue from a handful of products: the iPod, iPad, iPhone, and Mac computers. A single rival for just one of these products could change Apple's outlook dramatically.
Energy companies present a separate challenge. Their earnings are hard to forecast in part because unpredictable oil prices have a substantial effect on the results of corporations near the top of our list, like Exxon Mobil and Chevron. For example, some analysts expect oil to stay around $90 a barrel while others are certain crude will soar past $100 in the next few months. That $10 difference amounts to billions of dollars in revenue.
This list is dominated by oil and finance, two sectors coming off three-year roller coasters. Oil prices climbed to a record $147 in 2008 before collapsing more than 70 percent in the Great Recession. The U.S. financial sector required emergency support in late 2008. Today, the world's largest money center financial firms are returning to record profit margins.