Amid earthquakes and floods, debt crises, plunging markets and political gridlock, Minnesota's biggest companies in 2011 adopted Britain's wartime motto: "Keep calm and carry on."

Sales, profits and employment rose at Minnesota's 100 largest public companies last year as the U.S. economy gained traction.

By year-end, revenue rose 5.3 percent, slightly less than last year's 5.7 percent. Profits jumped nearly 12 percent, a bit below last year's 14 percent gain.

And payrolls gained a relatively strong 4.3 percent, or more than 57,000 jobs. That compares with 2010 when only a net 9,135 jobs were added.

But the collective market value of the state's 100 biggest publicly held firms barely budged from year-ago levels.

"It looks like they followed through on what they said they were going to do last year," said David Vang, professor of finance at the University of St. Thomas' Opus College of Business. "The fundamentals improved. But they did not get rewarded for it."

Several of the bigger Star Tribune 100 companies used these uncertain times as an opportunity to grow. Major deals included:

•Ecolab Inc. of St. Paul (No. 14) bought Nalco Holding Co. of Illinois for more than $5 billion. The deal adds about $4 billion in annual sales and nearly doubles Ecolab's headcount. The cleaning products giant adds Nalco's water treatment, pollution control and energy conservation operations to its cleaning, sanitizing and infection control businesses.

•Graco Inc. (No. 34) acquired the finishing business of competitor Illinois Tool Works in a $650 million deal that drew regulatory scrutiny. Graco, which makes paint sprayers and other coatings technologies, agreed to set aside Illinois Tool's finishing equipment unit pending a review.

•Pentair Inc. (No. 19) will merge with the pipe-and-valve business of Tyco International in a deal valued at $4.5 billion. Pentair, a maker of water pump and filter technologies, will keep its headquarters in Minnesota and its CEO will lead the combined firm.

•Stratasys Inc. (No. 60) agreed in April to merge with Objet Ltd. of Israel. The deal values the combined company at $1.4 billion. Both companies make three- dimensional printers that can replicate parts and build prototypes digitally. Stratasys will hold a 55 percent stake in the combined firm.

"They saw opportunities to expand their competitive footprint and expanded," said Chris Puto, dean of the Opus College of Business at St. Thomas. "Now the operations side of the business has to make it work."

Despite unrelenting global turbulence, most Star Tribune 100 firms performed well in 2011:

•Year-over-year sales rose at 76 companies last year; in 2010, 78 companies saw increases.

•78 companies posted profits, down from 80 in 2009.

•64 added workers in 2011, including Ecolab, UnitedHealth Group, 3M, Target, General Mills and U.S. Bancorp. That's the same number as in 2010, but a lot more jobs were added in 2011.

"The Top 100 have put some impressive numbers on the board," said Scott Anderson, senior economist for Wells Fargo & Co. "Strong companies tend to focus on their core business. That's how you survive in turbulent times."

The Star Tribune's annual assessment of Minnesota's largest companies reveals a diverse corporate landscape that remains strong in financial services, retail, manufacturing and health care.

Minnesota is home to 20 Fortune 500 companies, the highest concentration of headquarters firms per capita in the nation. Those big firms, and their high-paying headquarters jobs, have long been significant contributors to the local economy and the state's cultural climate.

The jobs reported by ST100 companies reflect their payrolls worldwide, not just in Minnesota.

While most Minnesota-based companies were hiring, 27 cut jobs last year. Three of them cut 1,000 or more jobs including Supervalu (15,000); Regis (2,000) and Christopher & Banks (1,000).

Minnesota state economist Tom Stinson said that as of March, Minnesota has recovered half of the jobs it lost during the recession, which ended in June 2009. The nation, meanwhile, has recovered just 40 percent of the jobs lost.

Unemployment in Minnesota reached 5.8 percent in March, down from 6.6 percent in March 2011 and 8.2 percent in March 2009. Minnesota's jobless rate remains significantly below the national rate of 8.1 percent.

"Since the recession started, we are growing jobs faster than the nation," Stinson said. "It's about time somebody said we are not in a recession. We are in an expansion ... part of what has to happen is that the public has got to believe it."

The 'fiscal cliff'

Perceptions of the recovery will be tested again in the coming months. The economy got off to strong starts in 2010 and 2011 but then, in the second half, uncertainty and volatile market trading gained the upper hand.

And this year?

"I think people are nervous again," said Dan Laufenberg, economist for Stonebridge Capital Advisors in St. Paul. Even when companies deliver strong results, there is skepticism, he said.

"How can you possibly continue to do as well as you did?" they say.

Laufenberg's answer? "They were already positioned for the bad news. Businesses are operating on a recession mentality. They still did not hire to the [pre-recession] levels they were at. They were able to deliver increasingly good returns, and that helped deliver the bottom line."

Going forward, Laufenberg said, consumers are feeling better and have the wherewithal to spend.

The reasons? More people are working; energy prices are starting to moderate, and household debt service as a percentage of personal income is down to the lowest levels in 20 years.

Keith Hembre, chief economist and investment strategist at Nuveen Asset Management in Minneapolis, offers another reason: "Housing is looking better, and that's a positive from last year."

Jeanne Boeh, professor of economics at Augsburg College, said a second recession will be avoided "unless we fall off the cliff."

Unfortunately, a cliff looms in the form of tax cuts that are set to expire at the end of the year.

Stinson calculates that expiration of the Bush tax cuts, the 2 percent payroll tax and some other, less-well-known tax breaks that have yet to be extended, coupled with the additional revenue expected under the current incarnation of the alternative minimum tax means "we are talking about a one-half-trillion-dollar tax increase in 2013 if Congress and the president don't do something before the end of the year."

In a tight election year that puts the White House, Senate and House of Representatives in play as daunting fiscal deadlines approach, many economists aren't even bothering to make forecasts beyond the end of the year.

"I don't think that most companies are aware of the economic turmoil that could occur," Stinson said. "They see themselves on their normal path and don't see the potential bump in the road."

Said Wells Fargo's Anderson: "There is enough to wring your hands about."

John Oslund • 612-673-7206 • oslund@startribune.com

Patrick Kennedy • 612-673-7926 • pkennedy@startribune.com

CONTRIBUTING BY CATEGORY

Among Minnesota's 100 biggest public companies, manufacturing firms contributed the most to profits in 2011, followed closely by health care companies. Retail and service firms accounted for the biggest portion of sales and nearly two out of every three jobs.

Manufacturing

For the third consecutive year, the state's most valuable firms, as measured by market capitalization, are in manufacturing.

•Global manufacturer 3M weathered an unusual year that included the tsunami in Japan, flooding in Thailand and debt woes in Europe, all regions where 3M has extensive operations. While sales and profits rose, market value dropped 11 percent. 3M, which ranked No. 1 in market value a year ago, slipped to second place.

•Higher prices for grains and other raw materials cut into profits at General Mills. Headcount rose 6 percent, however, to 35,000.

•Global fertilizer giant Mosaic delivered strong sales and profit gains even as it struggled with slower potash-based fertilizer sales. Mosaic's stock has been partially weighed down by uncertainty over the future of a key phosphate mine in Florida, a low-cost source of raw material for the firm's fertilizer. The mine suspended most operations in 2010 after environmentalists sued to block its expansion. The matter was settled in February, allowing Mosaic to expand the mine.

•Sales and profits at Hormel Foods rose as cost-conscious consumers continued to eat at home.

Retail / service

•Target's post-recession recovery continued in 2011 and the big retailer has gotten off to a strong start in 2012. Investors are beginning to notice. After languishing for a couple of years, Target's market value over the last 12 months jumped 8.7 percent through mid-April.

•The same cannot be said for struggling Best Buy, which saw sales drop 3 percent and market value down 34 percent. With online marketers like Amazon taking market share from big-box retailers, Best Buy is looking for both a new business model and a new CEO.

•Grocery wholesaler Supervalu delivered another year of stale results in 2011 as sales, profits, market value and headcount fell. Supervalu has struggled since it 2006 acquisition of Albertsons.

•Global freight broker C.H. Robinson achieved double-digit sales and profit increases but investors, who expected more, trimmed market values by 15 percent.

Health care

•Health insurance juggernaut UnitedHealth Group continued to grow sales, profits and payrolls. Its market value rose 23 percent, making UnitedHealth the biggest company on the Star Tribune 100 by both sales and market value.

•Sales and profits rose at Medtronic under new CEO Omar Ishrak, the former GE executive who took over a year ago.

•Minnesota's other big medical device maker, St. Jude, grew sales by 8.7 percent, but profits and market value dropped 9 percent and 28 percent, respectively.

•Dental products maker Patterson Cos. squeaked by with narrow sales and profit gains, but market value dropped nearly 11 percent.

Financial services

•U.S. Bancorp, the nation's fifth-largest bank, continued to use its strong balance sheet to acquire weaker rivals. Profits rose 47 percent in 2011 after rising 50 percent in 2010.

•Financial planner and insurer Ameriprise Financial boosted sales 10 percent and headcount 11 percent as it absorbed Columbia Management mutual funds.

•TCF Financial, which relied heavily on fee-income from its bank customers, saw sales, profits and market cap drop as it retooled its business model after financial reforms curbed fees.

Utilities / telecom

•Sales and profits at Minnesota's three big electric utilities rose last year. Meanwhile, sales rose and profits fell at Multiband Corp., which installs voice, video and data services for residential customers and is a major installer for DirectTV.

Information technology

•Hutchinson Technology, which makes suspension assemblies used in hard disk drives, became a corporate victim of the flooding in Thailand, where much of the world's disk drive manufacturing takes place. With industry production interrupted by the flood, Hutchinson saw sales drop 12 percent and suffered losses of $43 million.

•Digital memory maker Imation lost $46.7 million as sales dropped nearly 12 percent.

•Datalink was a tech industry winner in 2011. Sales at the company, which designs, installs and supports high-end data storage systems, jumped nearly 30 percent.

•At e-commerce firm Digital River, sales rose 10 percent but profits were off nearly 50 percent and market value was down 57 percent.