BlackRock deal vaults PNC to top of the heap
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For the second year running, PNC Financial Services Group captured the title of most profitable among Pittsburgh's Top 50 public companies .
Unlike some athletes, PNC did not merely coast to a second title on the backs of weak competitors. Instead, it delivered a stunning 96 percent increase in profits, banking $2.6 billion in net income in 2006, compared with $1.3 billion in 2005. A nice chunk of that represented the payoff from selling a big chunk of its stake in money manager BlackRock.
The runners-up did not rest on their laurels. U.S. Steel forged $1.4 billion in profits, up 51 percent from 2005's $910 million, and Mellon Financial rang up $898 million in net income, up 15 percent from its 2005 profits of $782 million.
Two companies that made the top 10 last year did not this year. With its departure from Pittsburgh, Alcoa's vacated its No.2 position on last year's list. And natural gas and energy exploration and utility firm Equitable Resources Inc. dropped a notch to 11t h as profits slid to $256 million from $260 million.
That left room for two newcomers to enter the Top 10. Electric utility Allegheny Energy debuted at No. 9 with $320 million in net income, and Latrobe metal cutting firm Kennametal landed the No. 10 spot with profits of $256 million.
The other five of the top 10 simply played hopscotch among themselves from 2005 to 2006. PPG Industries rose to fourth from sixth as profits bubbled to $711 million from $596 million; H.J. Heinz Co. remained in fifth position, although its net income of $646 million fell below last year's $753 million; Allegheny Technologies vaulted into sixth place from eighth, with $572 million in profits vs. $360 million; Consol Energy Inc.'s slide in profits, to $409 million from $581 million, kept it in seventh place; and American Eagle Outfitters moved up a notch, to eighth from ninth place, with net income of $387 million vs. $294 million.
While PNC's near-doubling of its profits made it the region's most profitable company, it was not nearly the greatest percentage change. Indeed, by that measure, PNC barely made the top 10.
Allegheny Energy earned the top spot, with a whopping 378 percent increase in profits. Indiana, Pa.-based Superior Well Services, which provides pumping services for oil and natural gas companies, increased profits by 256 percent and L.B. Foster, the Green Tree rail supply company, raised its profits 180 percent.
L.B. Foster, which also increased its profits by 400 percent in 2005, was one of only two companies whose net income growth put them in the top 10 for both 2005 and 2006. The other was South Side software firm Ansoft Corp., which posted a 100 percent increase in 2006 on top of a 200 percent increase in 2005.
All of those numbers are more than respectable, but they also show that last year our Top 50 found it a greater challenge to grow profits than in 2005, when the top five companies all increased their profits by 200 percent or more, led by Allegheny Technologies' astonishing 1700 percent increase.
Altogether, 30 companies increased their net income in 2006. At the opposite end of the spectrum, 18 companies, mostly in the banking, energy and tech sectors, saw their profits fall.
The drop-off included some dramatic reversals: Cheswick telecommunications firm Tollgrade Communications' net income fell 150 percent in 2006 after rising by 300 percent in 2005; profits at Warren fashion apparel firm Blair fell 100 percent after jumping 113 percent the year before; and Cecil software firm Ansys suffered a 68 percent drop in net income after a 26 percent increase in 2005.
First Published March 20, 2007 12:00 am