Global 500: The world's largest corporations

(Fortune Magazine) -- Just seven years ago Fortune was predicting that high-flying tech companies would soon displace the oil and auto giants that had been hogging the limelight at the top of the Global 500.

Well, look who's still riding high: Six of the top ten companies on this year's list are pumping petroleum, and three more are making vehicles that burn it. True, Wal-Mart (Charts, Fortune 500) regained its title as the world's largest company, with $351.1 billion in revenue.

Wal-Mart is number one for the fifth time in the last six years.

Full list: 2007 Global 500 1. Wal-Mart 6. Toyota Motor 2. Exxon Mobil 7. Chevron 3. Royal Dutch Shell 8. Daimler-Chrysler 4. BP 9. ConocoPhillips 5. General Motors 10. Total Global 500 by country Top-performing companies • Sales increases • Profit growth • Most profitable • Big employers

Galleries: • Top 25 • Most profitable • Money losers

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And thanks to a global M&A boom that paid out $11 billion in fees, the securities industry grew 45% by revenue in 2006. That lifted Morgan Stanley (No. 61), Merrill Lynch (No. 70), and Goldman Sachs (No. 72) into the top 75 for the first time.

But the big story was oil. Exxon Mobil (Charts, Fortune 500) (No. 2), fueled by high crude prices, was again the most profitable company in the world ($39.5 billion). The refining industry overall represented more than 14% of the Global 500's $21 trillion in total revenue. That rising tide of petrodollars lifted a Chinese company, Sinopec (No. 17), into the top 20 for the first time. But for tech companies like Apple (Charts, Fortune 500) (No. 367), up a phenomenal 125 places on the list, it's still a long way to the top.

Not all of the old-economy companies are doing well. Ford Motor (Charts, Fortune 500) (No. 12) fell out of the top ten for the first time in the Global 500's 13-year history. Its revenues shrank 10%, and losses totaled $12.6 billion, making it the losingest company on the list this year. General Motors (Charts, Fortune 500) (No. 5) lost money too, and BP saw its profits decline 1.5% in a year when crude prices remained high. But Asia's largest company, Toyota (No. 6), moved up two places and saw its profits rise 16% as customers flocked to its fuel-efficient and hybrid cars. If current trends persist, it should surpass GM next year to become the world's largest automaker by revenue.

Total revenues for the Global 500 rose 10.4%, to nearly $21 trillion, and net income went up 25.9%, to $1.5 trillion. Neither grew as quickly as the previous year, but the profit margin of 7% was the highest ever.

Big Oil might dominate the top ten, but money dominates the top 25. Ten of those are financial services firms, led by Netherland's ING Group (No. 13), followed by Citigroup (Charts, Fortune 500) (No. 14). Wall Street took advantage of low interest rates and well-funded private-equity firms to consummate $3.8 trillion worth of deals last year. "This has caused a windfall for the industry," says Matthew Albrecht, S&P's chief investment-banking analyst. "The merger boom increased both advisory fees and debt-lending and underwriting fees." One of the biggest beneficiaries: Goldman Sachs, which saw its profits jump 70% last year.

It wasn't just Wall Street reaping the benefits. Retail banking had a great year globally. European banks completed some of the biggest mergers in the continent's history. Italy's UniCredit Group (No. 97), Spain's Banco Bilbao Vizcaya Argentaria (No. 163), and Germany's Commerzbank (No. 216) all completed cross-border acquisitions. And Chinese banks, led by Industrial & Commercial Bank of China (No. 170), which boasted the world's largest public offering in 2006, made a big splash. The Agricultural Bank of China (No. 277) saw its profits go up nearly fivefold as it cleaned up its balance sheet in preparation for a public listing.

Growing global wealth also rewarded banks focused on high-net-worth individuals. The number of millionaires worldwide increased 8% last year, to 9.5 million, according to a Merrill Lynch and Capgemini survey. So banks with the largest private-banking practices had an especially good year. France's BNP Paribas (No. 25) and Switzerland's UBS (No. 27) each improved its ranking by nine places.

While the U.S. remains the world's locomotive of economic growth -- its 162 companies on the Global 500 account for more than a third of total revenue -- developing economies are increasingly driving growth in many sectors, including commodities, mining, and construction. "The U.S.'s role as an engine of growth might be overstated," says Richard Iley, senior economist at BNP Paribas. "There's an emerging maxim: If China needs it, you're going to do well. If China makes it, you're going to struggle."

Construction-materials companies such as Ireland's CRH (No. 293), France's Lafarge (No. 295), and Switzerland's Holcim (No. 372) all rose at least 30 places in the ranking because of building booms in the Middle East, Eastern Europe, China, and India. "It's been a challenge just to grow as fast as the market in those countries," says Lafarge CEO Bruno Lafont.

China, the world's fourth-largest economy by GDP, added four companies to the list, more than any other country, bringing its total to 24. Four years ago there were only 11. The new entrants include China Minmetals (No. 435) and China National Offshore Oil (No. 469), which had the highest rate of sales growth of any oil company in the world. After Toyota, Asia's next three largest corporations are now Chinese. But let's not overstate the case: Japan still boasts nearly three times as many companies above the Global 500's $14.9 billion revenue threshold (up from $13.7 billion last year).

One of the biggest gainers from the commodities boom was Mittal Steel (No. 99), which is headquartered in Rotterdam but whose founder, Lakshmi Mittal, is of Indian origin. It became the world's largest steel company last year after acquiring Luxembourg's Arcelor in a bitter fight, moving up 109 places on the list.

Brazil's mining giant CVRD made its debut on the list at No. 359 and led its sector with 54% revenue growth after completing the biggest mining deal ever, absorbing Canada's Inco. Also new to the list is South Korea's Hyundai Heavy Industries (No. 422), Asia's biggest shipbuilder, whose business has been buoyed by a global demand for containerships.

There were some new-economy success stories. Samsung Electronics (No. 46) became Asia's biggest consumer electronics firm, edging out Hitachi. Hewlett-Packard (No. 41), revitalized under the leadership of Mark Hurd, passed IBM (No. 42) for the first time to become the leader in the computers and office equipment category. And Taiwan added three new companies, including Asustek Computer (No. 427), which manu-factures key components for Apple's iPod.

Among the companies that fell off the Global 500 list were Eastman Kodak, whose performance continues to sputter; Albertson's, the supermarket company that got swallowed by private-equity firm Cerberus; Daiei, Japan's struggling department store chain; and PDVSA, the Venezuelan state-owned oil giant, which failed to provide financial data for 2006. Don't expect HCA (No. 265) or Alliance Boots (No. 328) to be back next year either. They were both taken private in 2006 and have stopped reporting financial data.

Speaking of next year's list, the big worry right now -- and one that could affect performance for many Global 500 companies -- is that inflationary pressures could lead central banks to raise interest rates. That would make it more expensive to borrow to finance big transactions. And it would make it costlier for developing economies to finance their fast-paced expansions. If the pessimists turn out to be right, the old economy might start looking its age.