Taxation and recession will challenge the $10 billion supplier club

In 2020 there were five suppliers whose annual net income was above $10 billion (see my Figure in which I’ve included the year to the end of September 2020 values). Managing net income for the benefit of shareholders will become even more important in 2021, when spending will decline in so many areas as we’ve seen. For American suppliers this will be made even more difficult if the incoming president puts up corporation tax, or countries and regions reasonably ask them to pay higher rates than the peppercorn ones many have got away with. Higher taxation of large suppliers will be part of the recovery plan of many governments, who will struggle to pay the interest on the many trillions they have had to borrow to handle the pandemic.
In the year there will be movement up and down for the world’s largest ITC suppliers. Those who may join the $10 billion club are Sony, Oracle, Cisco, AT&T, NTT Communications and IBM, while a couple of the current five may fall out.
Strengthening net income for these and other suppliers will become a greater challenge and we may look back at 2020 as the last for many in which such huge sums.
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