The squeeze came from major merger missteps, rising costs for energy and labor, and losses related to the meltdown of the subprime mortgage industry.
Companies that did find success with profit growth included Butler National Corp., Waddell & Reed, Garmin, QC Holdings and DST Systems.
These companies relied on a variety of strategies, including intensified marketing efforts and cost cutting. Some were well positioned in spite of a slowing economy.
QC Holdings, for example, offers payday loans and actually saw demand rise as the economy produced more cash-strapped consumers. The company also worked harder to reach out to potential customers and closed 50 branches that were not performing as well as others.
Business boomed for Garmin, the Olathe maker of navigational products.
Garmin enjoyed a record demand for its products and maximized profits by running efficient manufacturing operations.
Some companies posted strong profit growth last year with the help of one-time actions. DST, for example, saw its profits surge when it reaped a gain of hundreds of millions of dollars with the sale of its Asurion Corp. unit.
No company fell further than Sprint Nextel Corp.
Sprint was the region’s No. 1 overall firm in the Star 50 analysis published in 2006. This year it is at the very back of the pack in such categories as net income and net income growth.
The Overland Park wireless company acknowledged how much its business had eroded when it took a $29.7 billion write-off during the fourth quarter. Although it was a noncash accounting charge, the action hammered Sprint’s net income, dropping it to a 2007 loss of $29.5 billion from a 2006 gain of $1.3 billion.
The write-off came after Sprint determined that the acquisitions of Nextel Communications in 2005 and a series of smaller affiliate carriers no longer were worth as much as Sprint had paid for them.
As the region’s largest corporation, Sprint has an enormous effect on the combined fortunes of all the region’s companies.
With Sprint, the 55 regional publicly traded firms considered for Star 50 as a group posted a loss for 2007.
Even when Sprint is removed from the calculation, an overall profit drop of 61 percent shows how many other businesses also faced substantial challenges last year.
Excluding Sprint, the average profit for companies in this year’s Star 50 analysis was nearly $27 million, down from $68 million the previous year.
NovaStar Financial Inc. is on the brink of bankruptcy after being buffeted by the collapse of the subprime mortgage industry in which it operated. It swung to a loss of more than $700 million last year after posting a nearly $73 million gain in 2006.
YRC Worldwide, the Overland Park trucking giant, moved less freight as the economy softened. At the same time, it confronted climbing fuel costs and higher wages for drivers. Troubles integrating companies it had acquired also presented challenges. By the end of the year, YRC posted a loss of more than $638 million, down from a 2006 gain of more than $276 million.
| Company | Income in millions | Income growth | |
| 1 | Butler National Corp. | $1.03 | 390% |
| 2 | First Bancshares Inc. | $0.51 | 334% |
| 3 | DST Systems Inc. | $874.70 | 221% |
| 4 | Torotel Inc. | $0.26 | 181% |
| 5 | Waddell & Reed Financial Inc. | $125.51 | 172% |
| 6 | Inergy LP | $74.50 | 161% |
| 7 | Management Network Group Inc. | -$2.34 | 81% |
| 8 | Garmin Ltd. | $855.02 | 66% |
| 9 | QC Holdings Inc. | $14.60 | 59% |
| 10 | Ferrellgas Partners LP | $33.40 | 49% |
| 11 | Compass Minerals International Inc. | $80.00 | 45% |
| 12 | Layne Christensen Co. | $37.26 | 42% |
| 13 | Kansas City Southern | $153.80 | 41% |
| 14 | Entertainment Properties Trust | $104.66 | 27% |
| 15 | Great Plains Energy Inc. | $159.20 | 25% |
| Company | Income in millions | Income growth | |
| 1 | DST Systems Inc. | $874.70 | 221% |
| 2 | Garmin Ltd. | $855.02 | 66% |
| 3 | Commerce Bancshares Inc. | $206.66 | -6% |
| 4 | O’Reilly Automotive Inc. | $193.99 | 9% |
| 5 | Seaboard Corp. | $181.33 | -30% |
| 6 | Westar Energy Inc. | $168.35 | 2% |
| 7 | Great Plains Energy Inc. | $159.20 | 25% |
| 8 | Kansas City Southern | $153.80 | 41% |
| 9 | Cerner Corp. | $127.13 | 16% |
| 10 | Waddell & Reed Financial Inc. | $125.51 | 172% |
| 11 | Jack Henry & Associates Inc. | $108.17 | 10% |
| 12 | Entertainment Properties Trust | $104.66 | 27% |
| 13 | Compass Minerals International Inc. | $80.00 | 45% |
| 14 | Inergy LP | $74.50 | 161% |
| 15 | UMB Financial Corp. | $74.21 | 24% |
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