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With 2007 marking the start of the worst recession since the 1930s -- and with the annual Fortune 500 list recently reporting its worst slump ever -- it would be fair to expect the HispanicBusiness 500 suffered the same fate.
But they didn't.
Although many Hispanic-owned companies are feeling the sting of this economic calamity, the overall revenues of the nation's 500 leading Hispanic-owned firms actually went up, according to the 27th annual survey by HispanTelligence, the research arm of HispanicBusiness Magazine.
To be sure, the gain was a small 0.1 percent, with total revenues inching up to $36.15 billion from $36.13 billion the year before. Modest, yes. But in light of how earnings for the Fortune 500 plunged 85 percent, it's a surprising outcome, and a refreshing piece of good news.
On a broader note, however, the outlook isn't quite as rosy. Despite the miniscule boost in 2008, the year was really a continuation of the stagnation that began in 2007. That year, the HB 500 posted a loss of 0.5 percent. It marked just the third time the directory had witnessed a dip.
The four years before 2007 were an era of meteoric growth, with total revenues rising from $23.1 billion in 2002 to a high-water mark of $36.3 billion in 2006.
In a nutshell, this country's widespread economic downturn -- driven by the historic collapse of the automotive, banking, and construction industries -- has managed to temporarily stymie the upward ramping of the HB 500. But the bad economy has yet to send the HB 500's overall earnings significantly backward.
For the third straight year, the HB 500's top-ranked company was the aptly named Brightstar, a global telecom wholesaler.
But Brightstar's dominance is flagging. The company this year posted a dip in revenue of 2.35 percent, though it still brought in $3.6 billion, which is about $1 billion shy of the smallest company in the Fortune 500.
Medicaid Boosts Molina
Meanwhile, the HB 500's runner-up company, Molina Healthcare, the first HB 500 firm to make the Fortune 1,000 list, cut Brightstar's lead in half, posting an impressive $3.1 billion, a 24 percent increase.
Ironically, the bump is evidence of a bad economy, admitted CEO J. Mario Molina, son of founder C. David Molina. This is because Molina Healthcare serves people who are insured by Medicaid, the U.S. health program for those with limited resources. With the nation's unemployment rate hitting 8.9 percent in April, this includes a rising number of people.
"For every 1 percent that the unemployment level increases, you find another 1 million people eligible for Medicaid," Dr. Molina told HispanicBusiness Magazine. "What we're seeing is a growth on the enrollment side."
But the financial well being of Molina Healthcare is also the result of the 30-year-old company's longstanding tradition of keeping its administrative costs in check.
"You see no corporate jets here, no big off-site meetings, none of that stuff," Dr. Molina said. "I'm not criticizing companies that do that; for our company, it doesn't fit our culture."
Other companies are surviving amid unpredictable market forces. In 2007, the automotive, wholesale, and construction sectors made up nearly 60 percent of the directory's total revenues. In 2008, that amount shrank to just under 50 percent. Also, an unusually large number of firms -- 182 -- posted negative revenue growth in 2008 from the year before. That's compared to 129 in 2007, and just 60 in 2005.
