Orange County’s largest public companies saw a big rebound year in 2010 and are eyeing more gains this year.
The 120 largest public companies based here saw 2010 revenue of $99.9 billion, up 16% from a year earlier, according to this week’s Business Journal list—the centerpiece of an issue dedicated to public companies.
The companies posted a 2010 net profit of $3.5 billion, up 42% from a year earlier. The profit surge is even bigger if you factor out a legal settlement, restructuring and other onetime charges at some companies.
The gains are a turnaround from 2009, when many public companies here saw sales fall and resorted to big cuts to shore up profits.
“2010 was a rebound year for companies on a number of levels,” said Ian Corydon, director of research for B. Riley & Co., which helped compile our list. “As sales continue to rebound, companies will continue to invest in their businesses, including by hiring more employees.”
Many of the largest public companies here expect a strong 2011, though percentage gains could fall short of the big bounces seen in 2010.
No. 3 Irvine-based chipmaker Broadcom Corp. (see story, page 11) is “benefiting from some very powerful long-term trends entering 2011,” Chief Executive Scott McGregor recently told analysts.
On average, Wall Streets expects a 15% jump in Broadcom’s 2011 revenue to nearly $7.9 billion. Profits before charges and other items are seen growing a more moderate 2% to $1.5 billion.
The projected gains would come atop a 52% surge in 2010 revenue to $6.8 billion and an exponential leap in net profits from $65 million in 2009 to $1 billion last year.
Others, such as No. 5 Irvine-based drug maker Allergan Inc. (see story, page 13), are guarded about this year as they focus on product development.
And some companies still are working through the lingering effects of the recently ended downturn or other issues.
They include No. 6 Santa Ana-based title insurer First American Financial Corp. (see story, page 17), No. 8 Santa Ana-based vocational school operator Corinthian Colleges Inc. (see story, page 19) and No. 15 Anaheim-based retailer Pacific Sunwear of California Inc.
Sales
2010’s gains were widespread. More than two-thirds of the companies, 81, reported higher revenue.
The biggest percentage revenue gain came at No. 93 Irvine-based Plaza Bank, which saw a 215% rise in interest income—its equivalent of revenue—to $11.5 million.
The biggest gains by actual dollar amount came at No. 1 Santa Ana-based technology products distributor Ingram Micro Inc., which added $5.1 billion in revenue for a total of $34.6 billion, and others at the top the list.
One notable: No. 13 Santa Ana-based circuit board maker TTM Technologies Inc., which saw a doubling to nearly $1.2 billion in 2010 revenue.
Last year, TTM acquired Hong Kong’s Meadville Holdings Ltd. for $521 million, doubling its size.
More than a third of the companies, 45, posted higher 2010 net income or reversed losses from a year earlier.
Broadcom accounted for one of the biggest gains in net income. Other gainers included TTM, which went from $4.9 million in 2009 net income to $72 million last year.
No. 23 Aliso Viejo networking electronics maker QLogic Corp. saw 2010 profit rise 28% to $101 million, while No. 2 Irvine-based disk drive maker Western Digital Corp. was up 13% to $1.08 billion.
A drag on net income came from Allergan, which went from $624 million in 2009 profits to $4.9 million last year.
A legal settlement over flagship drug Botox drove the big decline. Late last year, Allergan paid $600 million to settle a government probe and lawsuit over its marketing practices for Botox, which is used to temporarily remove wrinkles, treat migraines and other conditions.
Onetime charges also weighed down others, including No. 9 Irvine-based nursing home operator Sun Healthcare Group Inc. (see story, page 21), No. 10 Huntington Beach-based clothing maker Quiksilver Inc. (see story, page 21) and No. 16 Irvine-based homebuilder Standard Pacific Corp.
The public companies followed a national trend of building up cash during the recent downturn. Combined, the 120 companies hold $23 billion in cash and short-term investments as of Dec. 31.
Their cash on hand is equal to 20% of their collective $118 billion market value as of April 1.
Broadcom is the cash king at $4.1 billion, or nearly a fifth of the total. Western Digital is next at $3.1 billion, followed by Allergan at $2.7 billion.
The companies have started putting some of their cash to work.
Western Digital said in March said it is paying $4.3 billion in cash and stock to buy smaller rival Hitachi Global Storage Technologies Ltd.
Broadcom last month said it is paying $313 million in cash and stock for Israeli chip startup Provigent Ltd., the biggest in a series of recent buys by the chipmaker.
With stronger sales and profits, the companies added workers at a rapid clip.
In OC, employment grew 5% to 35,892 employees. That topped the county’s overall 2010 job growth rate of 1.5%, according to the state Employment Development Department.
Broadcom was a big local employment gainer, rising 12% to 2,267 people.
No. 35 Costa Mesa-based military and industrial products maker Ceradyne Inc. was a sizable gainer with a 33% rise to 643 local workers.
Total Employment
Employment grew even faster at the companies’ operations across the country and around the world. Companywide employment rose 8% in the past year to 335,529 people.
Ingram Micro, Western Digital and Broadcom posted overall employment gains of 13% to 19%, fueled by acquisitions and growth.
With plants across Asia and in California, Western Digital is the largest companywide employer on the list at 62,500 workers, up 13.6% from a year earlier.
