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   | 2000 Globe 100 |

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

Banks top the profit chart

Tech firms run the gamut, from rebirth to nose dives

By Dolores Kong, Globe Staff, 5/22/2001

   

anks big and small, from FleetBoston Financial to Brookline Bancorp, topped The Globe 100 charts for profitability, proving there's steady money to be made the old-fashioned way.

Technology firms, on the other hand, ran the gamut last year, with some making loads of money and others losing big bucks, some rising from the ashes, and others taking nose dives.

With banks, said Charles L. Hill, director of research for Thomson Financial/First Call in Boston, ''It is a place where you're still above water, and with prospects of things getting better.''

But with high tech, ''Who knows whether it will get a lot worse before it gets better,'' he said.

In sheer dollar amounts, FleetBoston won the profitability title, with $3.38 billion in net income last year - far ahead of the rest of the pack and dramatically up from its 1999 net income figure of $1.98 billion.

Next on the profitability list were EMC, with $1.78 billion in net income; Gillette, with $820 million; Analog Devices, $704.5 million; and State Street Corp., $595 million.

While Fleet topped the chart in part because of the BankBoston merger, it was number one in absolute profits even before the combination, in 1996 and 1998. The big bank keeps getting bigger.

The small banks are growing, too.

Out of the 10 Massachusetts companies with the highest profit margins last year, seven of them were small community banks: Brookline Bancorp, Massbank Corp., Andover Bancorp, Medford Bancorp, Lawrence Savings Bank, Warren Bancorp, and MetroWest Bank.

Paul Bechet, chief financial officer for Brookline Bancorp, said banks tend to have higher profit margins (net income as a percentage of revenue) than nonbank companies because that ratio highlights what banks do: generate revenue on a relatively small asset base.

''While we like to be on charts that show that we're ranked well, my honest side tells me we have to explain why we're there,'' Bechet said.

But he acknowledged that Brookline Savings Bank, which went public as Brookline Bancorp in 1998, also profited by getting business from former Fleet customers.

With a 2000 profit margin of 42.88 percent, Brookline Bancorp ranked third, behind RSA Security, an Internet security firm with a 73.44 percent profit margin last year, and Aware Inc., a DSL technology firm with a 49.02 percent margin.

While banks big and small made steady money across the board, tech firms were more volatile.

Taking a nose dive were the likes of CMGI Inc. (which went from making $6.5 million in 1999 to losing $4.27 billion in 2000) and Parametric Technology Corp. (which went from a $99.7 million profit in 1999 to a $2.1 million loss in 2000).

And topping the ''Born again'' list of Massachusetts companies that lost money in 1999 but turned a profit in 2000 were such diverse tech firms as Varian Semiconductor Equipment Associates and Sycamore Networks Inc.

Varian's treasurer, Alan L. McKinnon Jr., described its more than 100 percent change in net income from 1999 to 2000 as ''phenomenal growth.''

He attributed it to a turnaround in the semiconductor equipment industry and the company's dominance of ion implantation, the process of making silicon chips found in everything from computers to cellphones.

Dolores Kong can be reached by e-mail at kong@globe.com.

   


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