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   | 2000 Globe 100 |

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The Boston Globe OnlineBoston.com Boston Globe Online / Business / 2001 Globe 100

A question of momentum

Sales leaders' challenge is to keep up pace after a hot year

By Chris Reidy, Globe Staff, 5/22/2001


''What have you done for me lately?'' is a standard mantra of the unfeeling boss, but investors may be asking the same question of some of the companies that placed near the top of the Globe's Sales 100.

The Sales 100 ranks the Commonwealth's publicly traded companies by year 2000 revenues. Several companies that made the top 10 turned in terrific performances last year, but a slowing economy has had some of them warning Wall Street in recent months that they are losing momentum.

Take the case of Sycamore Networks Inc. A maker of optical networking products used by the telecommunications industry, the Chelmsford company saw its revenue soar during calendar year 2000 to about $419 million, a 600 percent gain. No other company in The Globe 100 universe saw such revenue growth last year.

But faced with a sudden, industrywide slump, Sycamore this spring hit what it called ''a bump in the road.'' Shares that at one point in 2000 traded near $190 recently fell below $10, and the company announced layoffs.

At first glance, little changed in the top 10 ranks of the Sales 100. Nine of the top 10 firms on the list in 1999 returned in 2000. And top 10 companies generally fell into three categories: high tech, financial services, and retail.

Once again, Raytheon Co. of Lexington topped the Sales 100.

But as the defense industry consolidates, the environment continues to challenge companies such as Raytheon. Though profits were off, Raytheon said it achieved its financial goals for 2000. Revenue fell about 2 percent to $16.9 billion, mostly because of divestitures. The sale of Raytheon's construction and engineering division is the subject of a lawsuit and could hurt performance.

Following the merger of Fleet Financial Group and BankBoston Corp., 2000 was the first full year for FleetBoston Financial Corp., and it was a success, the company said. By the Globe's calculations, revenue grew 12 percent, to $14.35 billion. Using a different yardstick, Fleet reported revenue of $15.55 billion, up 13 percent. In any case, results exceeded internal projections as Fleet's capital-markets divisions turned in stronger-than-expected performances. That may not be the case this year. But with a sharper customer focus and the acquisition of Summit Bancorp, FleetBoston is optimistic as Chad Gifford prepares to take over from chief executive Terrence Murray.

Revenue at Staples Inc. was up nearly 20 percent, to $10.67 billion. And by many measures, it outpaced its rivals, but 2000 was a challenging year for the Framingham-based retailer, which sells office supplies and business services in stores as well as through catalogs and on the Internet. A slowing economy, along with the company's aggressive investment in its dot-com business, hurt profits, and plans to spin off Staples.com as a separate company were later scrapped.

At such chains as T.J. Maxx and Marshalls, consumers bought enough off-price merchandise for corporate parent TJX Cos. to post 2000 sales of about $9.6 billion, a nearly 9 percent gain.

While that was a solid performance, it did not match some of the stellar results that Framingham-based TJX turned in for most of the late 1990s. Unseasonably cold weather in February and March had TJX lowering its forecasts for the first quarter.

And 2000 was a turbulent year for Gillette Co., the Boston-based maker of razors, Duracell batteries, and Oral-B toothbrushes that was a star for much of the 1990s.

Faced with foreign currency issues and slowing battery sales, Gillette ousted its chief executive last year and announced layoffs. The company also sold its stationery business.

On a continuing-operations basis, sales grew nearly 2 percent, to about $9.3 billion. It's now up to new chairman and chief executive James M. Kilts to restore Gillette to its historic growth rates.

EMC Corp. saw its torrid momentum slow a bit in recent months as the economy softened demand for its data-storage products. Another potential challenge ahead: new competition.

But by almost all measures, 2000 was a healthy year for the Hopkinton company. Revenue grew 32 percent, to $8.87 billion, and EMC maintained its lead over its rivals.

In 2000, revenue at BJ's Wholesale Club Inc., of Natick, grew 17 percent, to $4.93 billion. Net income was also up as the retailer continued to execute on the nuts-and-bolts of its business. Cost controls and a surge in new club members were among the reasons BJ's turned in its 10th straight year of improved profitability.

State Street Corp., of Boston, which specializes in asset management and investor services, posted its 23rd consecutive year of double-digit earnings-per-share growth and reported revenue of $3.6 billion. According to the Globe 100 analysis, State Street's revenue rose 7.5 percent last year. But when results are restated to reflect the sale of its commercial bank operations in 1999, revenue grew 16 percent.

Despite a slowing economy, State Street's new chairman and chief executive, David A. Spina, says the company can navigate the ebbs and flows ahead, in part because aging populations around the world will need more services of the kind State Street provides for managing retirement savings.

At Allmerica Financial Corp. in Worcester, which sells insurance and retirement investment products, revenue dropped nearly 2 percent, to $3.087 billion. That was partly because of a tax strategy, the company said. Premium revenues were up, and Allmerica said it achieved record earnings for the sixth straight year.

If your specialty is testing computer chips, 2000 was a great year to be in business. Such was the case for Teradyne Inc., of Boston. Its revenue shot up nearly 70 percent, to just over $3 billion. But because of an industrywide high-tech slump, demand has slackened in recent months, and Teradyne announced layoffs. Still, long-term fundamentals remain sound.

Chris Reidy can be reached by

e-mail at reidy@globe.com.


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