Microsoft Tops Delahaye’s Media Index of Corporate Reputation
News of Strong Earnings Boosts Energy Industry as American Auto Companies Take Fall
NORWALK, CT, February 21, 2006 – Elevated by news of strong revenue growth, product development and financial management, Microsoft Corp. (Nasdaq: MSFT) benefited most greatly from the nation’s leading media in 2005, according to the Delahaye Index, a quarterly assessment of how news coverage reflects and helps to shape the corporate reputation of the 100 largest U.S. companies.
The Index is conducted by Delahaye, a provider of media research and analysis services for communications, public relations, and marketing professionals.
Buoyed by news of strong financial performance, the energy sector demonstrated the most improvement in 2005 despite accusations of profiteering, as Exxon Mobil Corporation (NYSE:XOM) rose 17 places, Chevron Corporation (NYSE:CVX) advanced 12 spots, and ConocoPhillips (NYSE:COP) climbed 10 places.
Stories of declining fiscal health finally caught up with General Motors Corp. (NYSE:GM) in the fourth quarter of 2005, as aggressive pricing promotions could no longer sustain a balance of positive news. As a result, GM tumbled from fourth place in the third quarter to 99th in the fourth quarter of 2005 amid news of declining sales and layoffs. Despite the massive fall in the fourth quarter, GM only decreased two spots in the yearly rankings because of its strong showing for the first three quarters of 2005. Ford Motor Company (NYSE:F) fell in 2005, going from 11th place to 21st place due to negative stories of credit rating downgrades and falling sales.
The Walt Disney Company (NYSE: DIS) gained ground in 2005 to finish in third place with positive media attention generated by the unanimous election of Robert Iger as Chief Executive Officer and the opening of Hong Kong Disneyland. Verizon Communications (NYSE: VZ) affirmed its bellwether status for the telecommunications industry with its acquisition of MCI in 2005. The auspicious event capped a high volume of favorable news that boosted the telecom giant to fifth place in 2005.
Delahaye President Mark Weiner stated that, “Corporate reputation is uniquely measurable through the media, as the news has a distinct way of both affecting and reflecting public sentiment. Major findings of our 2005 study, in which we analyzed 300,000 stories, indicate two primary trends: The first is that most corporate reputations are driven by financial news, and the second is that corporate news is generally positive. Looking at these two trends in tandem, one can infer that the economic climate for America’s largest companies was favorable in 2005, and to the extent that news coverage helps shape public opinion and that corporate reputation contributes to business performance, we foresee that favorable corporate momentum will continue into 2006.”
Despite several quarters of high-profile negative coverage, Wal-Mart Stores, Inc. (NYSE: WMT) holds second place for 2005. As with many of the top-ranked companies this quarter, Wal-Mart produced a significant amount of negative media attention, but positive coverage, including their efficient response to hurricane Katrina outweighed negative news of workplace bias and community backlash.
“The Delahaye Index is driven by two catalysts for corporate reputation-building: business performance, as reflected in the quality of news, and visibility, as reflected in the volume of news coverage,” stated Senior Vice President K.C. Brown, who created and oversees the study. “As such, companies with excellent business fundamentals can be affected adversely if they do not generate sufficient visibility. Conversely, companies such as Wal-Mart, which may have less positive or less impactful media coverage, can improve their results by consistently garnering a great volume of marginally positive media attention.”
The world’s leading chip maker, Intel Corporation (Nasdaq: INTC) was elevated to fourth place for the year with news of Apple’s announcement to deliver models of its Macintosh computers with Intel microprocessors.
2005 Delahaye Index: Top Ten Companies
- Microsoft Corporation
- Wal-Mart Stores, Inc.
- The Walt Disney Company
- Intel Corporation
- Verizon Communications, Inc.
- The Boeing Company
- Goldman Sachs
- Time Warner
- General Motors Corporation
Methodology of the 2005 Delahaye Index
Delahaye begins by gathering news from America’s most prominent national news sources. From the New York Times and The Wall Street Journal to Fortune, ABC World News Tonight and Bloomberg, Delahaye captures news from all of the nation’s most influential general and business media. The 2004 Delahaye Index includes analysis of different print and broadcast news items to measure the reputations of the Top 100 U.S. companies.
Each company’s score is based on how many positive and negative reputation-driving attributes are found within each story. These attributes are classified into five dimensions: stakeholder relations, financial management, products and services, organizational integrity and organizational strength.
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