In 2022, Minnesota companies continued to struggle with supply-chain issues, rising inflation and interest rates. Companies tried to compensate by increasing prices, but it can take months before the price actions that are taken start showing up on a company's bottom line.
Revenue growth slowed as well, but profits were even more challenged and with the stock market down, half of Minnesota's largest public companies saw their market value decrease from the end of April 2022 through the end of April this year.
Company leaders remain concerned about challenging economic conditions. Pushed by Federal Reserve interest rate hikes, many economists are still predicting an economic slowdown or recession this year. Through the first quarter of 2023, even the companies that reported better-than-expected results were hesitant to increase their guidance for the remainder of the year.
The Star Tribune ranks the 50 largest public companies in the state by revenue, and customer demand remained strong enough that collectively, the firms saw revenue increase 7% to a total of $750.7 billion.
But profits suffered, and income before extraordinary items declined 6.4% to $59.7 billion, and the collective market caps of the companies dropped even further, down 8.3% to $1.15 trillion.
Seven companies lost revenue during the year, including Best Buy, where overall sales fell 18.3%. It was not enough to change its ranking, though, and it is still the third largest public company in Minnesota.
The biggest revenue decrease among the 50 came at investment-banking firm Piper Sandler. The firm continued to strengthen key teams by expanding the number of managing directors, but the overall market for deal activity slowed, and its results followed. Piper Sandler's annual revenue was down 29.7% and it lost seven spots in the revenue ranking, moving from No. 26 a year ago to No. 33 on this year's list.
Harder to make list
It was more difficult to make the list this year. Clearfield Inc. was ranked 50th, at the floor of the list. The supplier of fiber and connectivity products had revenue of $305.7 million. Clearfield moved up seven spots in the rankings with a 27.6% increase in its revenue.
A year ago, Inspire Medical Systems ranked 50th with revenue of $233.4 million. The fast-growing Golden Valley-based maker of devices to treat sleep apnea saw its revenue increase 74.7% to $407.9 million, making it the second-fastest growing company on the list, moving it up to No. 47.
Rising through the ranks
New Brighton-based APi Group rose four spots in the revenue ranking to No. 15 as it added $2.6 billion more in revenue thanks mainly to its acquisition of the Chubb fire and security business from Carrier Corp. officially at the beginning of 2022. The $3.1 billion deal greatly expanded APi Group's international operations and added 13,000 more employees.
The independent energy company, Wayzata-based Northern Oil and Gas, had the most dramatic revenue increase with annual revenue that increased more than 200% to $1.57 billion. It climbed 12 spots in the revenue ranking from No. 42 to No. 30 this year.
Bigger and more diversified, it expanded smartly and aggressively into Texas, New Mexico and Pennsylvania from its namesake range of North Dakota and Montana. Analysts are expecting revenue to climb another 21% in 2023.
Even more impressive than the revenue growth is the profit generated by Northern Oil and Gas. Net income was $773.1 million, up from $6.4 million in the prior year.
Several companies saw profit drops
Ten companies lost money over the past year with the biggest loss coming from struggling Bright Health Group. Another 13 companies saw their profits decrease.
Bright Health also lost 91% of its market value from April 29, 2022, to April 28, 2023, while iMedia Brands also lost 87% of its value during that time and its stock listing moved to a lower tier of Nasdaq. It has been late filing its latest quarterly and annual reports with the Securities and Exchange Commission, but did complete a complicated sale/leaseback deal for several of its properties that gives it a little financial reprieve.
At the top — and growing
Ranked No. 1 again, Minnetonka-based UnitedHealth Group continues to dominate the list. It's the fifth-largest public company in the United States by revenue, and nearly three times larger than Minneapolis-based Target Corp., the second-largest company in Minnesota. It is also the largest public company in Minnesota by its market capitalization — 3.5 times larger than the second-ranked company in that category, Medtronic.