A king deposed, a new one crowned. An empire in decline, several others in ascent. A smaller city battling punch for punch with far larger ones.
It sounds like the plot of a Game of Thrones spinoff. But such was the last year in North Texas’ business world, highlighted by the departures of some of its best-known names, multibillion-dollar revenue swings and a new largest company asserting its place atop the mound.
The Dallas Morning News’ annual ranking of the 150 largest publicly traded companies in Dallas-Fort Worth, based on revenue from fiscal year 2023, is here to unpack the chaos. The ranking is one of the most comprehensive on the market, making it a useful tool for potential job seekers, a reference for rivals looking to check in on their competitors and a gauge of the region’s general business health.
Here are the takeaways.
‘Nobody drives a truck for free’
Exxon Mobil Corp. was D-FW’s most profitable company every year except one since it moved from New York in 1989. But with the oil colossus now headquartered near Houston, the only company to have unseated it in the past now sits unchallenged atop the area’s business throne.
Topping the rankings for the second time in its history is Irving-based medical distributor McKesson with $276.7 billion in revenue, a 5% increase from 2022, and $3.7 billion in profits. McKesson handles the distribution of roughly one-third of the country’s drugs, buying them from manufacturers before storing them in warehouses and shipping them to hospitals and clinics.
McKesson’s success shouldn’t be surprising, based on how the American health care system operates, said Keith Thurgood, a clinical professor of health care leadership and management at the University of Texas at Dallas.
“Part of the reason that we’re in the situation that we are in is because the system was designed to do what it’s doing,” Thurgood said.
Behind only physician salaries and hospital facility upkeep, a hospital’s third-largest expenditure is drugs, Thurgood said. Historically, hospitals and doctors have been paid based on how many tests they run and how much medicine they prescribe, which means facilities need to stock and use lots of different pharmaceuticals to remain profitable. Rural hospitals especially, which are often the only ones in their area and may be tighter on cash, need the supply chain to remain stocked.
A reliable supply line is a vital organ for hospitals, and someone has to store and ship the drugs to hospitals, and McKesson has plenty of room for healthy take-home profits. Since 8% of all drugs were in short supply in 2022 and 13% in 2023 — driving prices up 11.5% and 15.2%, respectively — McKesson can sell the drugs it buys in bulk to hospitals for hefty gains.
“Nobody drives a truck for free, folks,” Thurgood said. “There’s no free gasoline out here. There’s no free warehousing.”
McKesson helped health care become D-FW’s highest-grossing industry in 2023, despite the sector’s notoriously slim margins, by accounting alone for more than 90% of the category’s revenue. Dallas-based Tenet Healthcare, which manages more than 50 hospitals and hundreds of other health facilities, was the second-highest grossing company in the industry, sitting 11th overall on $20.5 billion in profit, a nearly $1.4 billion bump from 2022.
Integer Holdings Corp. and Addus HomeCare Corp. also brought in $1 billion or more in revenue, good for increases of 42% and 11% from 2022, respectively. The biggest loser in the sector was AMN Healthcare Services Inc., which dropped nearly $1.5 billion for a 28% decrease, but it still brought in $3.8 billion in sales for more than $210 million in profit.
Energy ‘trucking along’
Historically D-FW’s largest industry and 2022′s big winner, energy had an unremarkable 2023 in comparison.
Excluding Exxon Mobil, D-FW energy companies combined brought in just under $202 billion in revenue compared with last year’s $224.9 billion. Even if revenue was largely down, every D-FW-based energy company except two still recorded net profits, and the industry put three companies in this year’s top 10 — hardly doomsday after a couple boom years.
“I don’t think the term ‘stagnant’ is really appropriate,” said Hugh Daigle, an associate professor at the University of Texas at Austin’s Hildebrand Department of Petroleum and Geosystems Engineering. “It’s just kind of the whole market is trucking along at this more or less balanced pace.”
Fuel demand increased in 2021 and 2022, when people were doing the most “revenge travel” in response to the lengthy COVID-19 lockdowns and had the most money to burn, Daigle said. 2022 was abnormally lucrative for oil companies, with a per barrel price of around $100, between $20 and $30 more than current prices.
“2022 was so anomalous in terms of oil prices and gasoline prices. I see a lot of these economic charts where they just leave out 2020 because the numbers will be so skewed, and it’s almost like you gotta think of it that way,” Daigle said. “It was just like don’t count 2022. It’s such an outlier.”
Energy’s top company in 2023 was Dallas-based pipeline magnate Energy Transfer, which placed third with $78.6 billion in revenue. Dallas-based petroleum refiners and distributors HF Sinclair Corp. and Sunoco LP placed seventh and 10th with $32 billion and $23.1 billion in revenue, respectively, while Pioneer Natural Resources Co. was 13th with $19.3 billion in its final year on the list after its May 2024 acquisition by Exxon Mobil.
Despite the high totals, only five energy companies increased their revenue this year. Every company with more than $10 billion in 2023 revenue except Vistra Corp. saw revenue fall at least 10% compared with the prior year, led by Energy Transfer’s $11.2 billion decrease and EnLink Midstream LLC’s 28% drop.
Oil’s slide can also be attributed to a general “economic slowdown” that has decreased people’s desire to travel by car, said Patrick De Haan, GasBuddy’s head of petroleum analysis. Even if fuel prices were “more favorable” last year, the same demand isn’t there because so many other things are more expensive. And since the main product of refineries is gasoline, they are “beholden” to Americans’ desire to travel, De Haan said.
“The American summer road trip is being hit hard because while gas prices are down right now compared to last year, consumers are still feeling the effects of other areas of the road trips,” De Haan said. “Hotel expenses, restaurant prices, entertainment costs are all very high.”
As for the future, much of it hinges on what happens this November, De Haan said. He noted a potential “paradigm shift in energy policy” depending on who wins the presidential election, with a Republican administration likely to lessen oil costs with pro-oil policies and a Democratic White House likely to take an “anti-oil stance” and prioritize energy diversification efforts that raise prices.
Regardless, energy companies will “find ways to maintain profitability” no matter who is in office, Daigle said.
‘Trying to figure out who they want to be’
Aside from oil and gas, the only industry represented more than once in the top 10 were D-FW’s longtime air carriers.
Fort Worth-based American Airlines and Dallas-based Southwest Airlines brought in more revenue than in 2022, netting $52.8 billion and $26.1 billion, respectively. That placed them fifth and ninth in this year’s ledger.
But the picture isn’t as rosy as it first seems. American pocketed $822 million in profit, and Southwest took in a comparatively modest profit of $465 million, far behind industry competitors. Although Southwest is smaller and markets itself as a low-cost carrier, hence its lesser revenue and lesser profit, American’s fellow international carriers Delta and United took home $4.6 billion and $2.6 billion in profit from $58.1 billion and $53.7 billion in revenue, respectively.
Longtime airline analyst William Swelbar likened pre- and post-pandemic air travel to two halves of a basketball game: The companies that made tactical switches at halftime got ahead and those that didn’t, didn’t. Both D-FW airlines, despite revenue increases, fall in that second camp.
Air travel has seen a surge in demand since the end of the pandemic. But since fares rarely cover the cost of flying between cities, labor costs are increasing, and the “growth in seats is greater than growth in passengers,” airlines more than ever have to “generate revenue in a number of ways,” Swelbar said. This includes cargo, frequent flier and credit card programs as well as amenities that cater to certain types of travelers.
It’s in this “differentiating of product” where Southwest and American have lagged behind United and Delta, which have lasered in on business and long-haul travelers by providing services such as sleeping cabins or extra legroom as well as additional international routes.
“Both [American and Southwest] are certainly chasing the leisure-oriented passenger, but they just don’t have cost structures that can continue to do business the way they used to,” Swelbar said.
Southwest has already announced major changes, including the addition of red-eye flights and premium seating in favor of its longtime no-assigned-seat policy. A turbulent last couple years for Southwest also featured a cataclysmic operational meltdown that led to thousands of canceled flights and activist investor Elliott Management buying a 7% stake in the company this summer to advocate for leadership changes.
“We are taking urgent and deliberate steps to mitigate near-term revenue challenges and implement longer-term transformational initiatives that are designed to drive meaningful top- and bottom-line growth,” Southwest CEO Bob Jordan said in the company’s second quarter report.
American is planning to address “revenue weaknesses” at a September meeting, Swelbar said. The airline has also received numerous customer complaints over racial discrimination on an American flight and a child who was filmed by a flight attendant while using the airplane restroom.
“When we return to the level of revenue generation we know we can achieve, and we couple that with our operational reliability and best-in-class cost management, we will unlock significant value,” American CEO Robert Isom said in the company’s Q2 report.
Both airlines are also dealing with Boeing delivery delays and have decreased the number of new planes they expect to get this year.
“Whereas it could be said that in the past the metroplex was home to the airline leadership, today I see the metroplex as home to two airlines trying to figure out who they want to be and where they will fit in tomorrow’s industry,” Swelbar said.
The rest of the way
The rest of this year’s top 10 featured Dallas-based telecommunications giant AT&T in second place and real estate company CBRE Group Inc. in eighth. Irving-based heavy equipment manufacturer Caterpillar Inc. was fourth, and Arlington-based construction giant D.R. Horton was in sixth. AT&T saw a modest increase of 1% in revenue but took home $15.6 billion in profit, more than any other company in D-FW.
Other big hitters near the top of the table included Kimberly-Clark Corp. — the brand behind Cottonelle and Huggies — in 12th, finance giant Charles Schwab Corp. in 14th and semiconductor monolith Texas Instruments Inc. in 15th, though the latter two posted a combined revenue dip of more than $4 billion from last year.
Dallas led all cities in total revenue and number of companies in the top 150, with its 68 representatives earning a total $478.4 billion, with 34 of them exceeding $1 billion. Irving and its 16 companies, carried heavily by McKesson and Caterpillar, came in second with a combined $452.4 billion in revenue. Thirteen companies based in the self-proclaimed “headquarters of headquarters” passed the billion-dollar mark in revenue, and seven passed $10 billion.
It was a tough year for Grapevine, whose three companies — GameStop Corp., Southland Holdings Inc. and Solo Brands — each posted revenue decreases and net losses. Richardson-based Lennox International Inc. and Fossil Group Inc. each crossed a $1 billion in revenue. Plano’s YumChina, the company that owns Taco Bell, KFC and Pizza Hut, surged 15% to pass $10 billion in revenue and place 21st, two spots higher than last year.
Entertainment and retail companies did well, with Cinemark Holdings Inc. (+$612 million), Dave & Busters Entertainment Inc. (+$240.8 million), FirstCash Inc. (+$422.9 million), WingStop Inc. (+$102.6 million) and Brinker International Inc. (+$329.1 million) all posting healthy increases despite GameStop’s $654.4 million dip. Real estate also had a positive year, with only Forestar Group Inc. and Landsea Homes posting less revenue in 2023 than they did in 2022.
In total, D-FW’s top 150 companies brought in nearly $1.3 trillion in revenue in 2023. If that were a country, its GDP would sit 17th in the world.
