Top rank: 1 Apple
Rank in Computers: 1
It is a tribute to its CEO that Apple, which ten years ago seemed headed for the slag heap, is No. 1 on this list. Steve Jobs has always had a knack for weaving magic out of silicon and software. But who knew he could build a $24 billion (in sales) company on the strength of a portable jukebox and a computer with a single-digit market share?
His pitch, as he leveraged the success of the iPod, was very simple: Apple products work, and if you buy more than one, they work better. The company (if not its stock) is on a tear, but even with the economy weakening, it will be interesting to see how economically sensitive this growth engine is.
Top rank: 2 Berkshire Hathaway's
Rank in Insurance: Property and Casualty: 1
To see "admiration" in action, just look at Berkshire Hathaway's stock chart from last fall. As other financial shares were getting hammered -- some Berkshire investments among them -- investors bid up Berkshire's own stock by 27%.
Why? Wall Street believes that Berkshire and its acclaimed leader, Warren Buffett, possess a matchless ability to turn today's problems into tomorrow's profits. The key to this ability: "An absence of any regard for short-term results," says Don Graham, CEO of the Washington Post Co. (of which Berkshire owns 18%). Indeed, Berkshire has just launched a bond insurance company to compete with troubled MBIA and Ambac. It has also invested $800 million in subprime-battered Swiss Re.
Can Buffett, 77, continue making lemonade from lemons? There's no reason to think otherwise. Of greater concern: Who takes over once the legend is gone? -Jon Birger
Top rank: 3 GE
Rank in Electronics: 1
GE is no longer No. 1, but its reputation has still held up well, considering. The company gets half its profit from financial services but announced it was bailing out of subprime in July, before the worst trouble hit.
The resulting write-offs didn't dent earnings significantly. While its stock is stuck where it was six years ago, GE remains America's top shareholder-wealth creator, and it continues to deliver profit growth of 15% or more, remarkable for a $173 billion company. -Geoff Colvin
Top rank: 4 Google
Rank in Internet Services and Retailing: 2
Microsoft may be bigger, but everything in the tech world revolves around Google. Its "Do no evil" motto has become a kind of Hippocratic oath for other Silicon Valley firms, and even its fiercest critics agree that Google sees itself as the caretaker for the web. Competitors talk of meetings where Googlers, as altruistic as Santa's elves, ask, "What's good for the web?" Of course, what's good for the web has also proven to be very good for Google. -Josh Quittner
Top rank: 5 Toyota Motor
Rank in Motor Vehicles: 2
In the past 12 months Toyota has seen three top American executives defect to competitors, been humiliated in its first season of NASCAR racing, and had its reputation for impeccable quality sullied. Yet those were mere speed bumps as it cruised to second place in U.S. car and truck sales (passing Ford) and took the winner's circle in worldwide sales.
Toyota continues to add capacity, invest in hybrid technology, and roll up the healthiest profits in the industry. If 2007 was a tough year for Toyota, imagine what a good one looks like. -Alex Taylor III
Top rank: 6 Starbucks
Rank in Food Services: 2
After years of dizzying growth, there's trouble brewing at Starbucks, which dropped four places on this year's list due to weak sales, overexpansion, and intense competition. Its once-soaring stock trades for about half what it fetched a year ago, and in January chairman Howard Schultz returned as CEO. But Starbucks remains a sought-after employer, and its brand, while bruised, is still powerful. -Matthew Boyle
Top rank: 7 FedEx
Rank in Delivery and Logistics: 2
With fuel costs rising, it may be FedEx's environmental efforts that matter most these days. Aside from hybrid vehicles, which are becoming key across the industry, the company has also focused on solar energy; a new installation at its Oakland hub generated 80% of the facility's energy demand.
It's that kind of innovation, says CEO Fred Smith, that has made "FedEx" a household verb. And it shows no signs of exiting the lexicon anytime soon. The $35.2 billion company experienced its busiest day ever in December, handling 11.4 million packages. -Nadira A. Hira
Top rank: 8 Procter & Gamble
Rank in Soaps and Cosmetics: 1
As a Navy veteran, A.G. Lafley knows that turning around an aircraft carrier can't be done on a dime. Neither can turning around a mature conglomerate. That is the task Lafley assumed in 2000, after the company had suffered two profit warnings.
But like a ship, once the change in direction is made, a company can gain a certain momentum. And that has been the case with P&G, whose adjusted stock price has more than doubled on Lafley's watch. The key to P&G's success: strategic focus, innovation, and internationalization. Lafley's next challenge: to make sure he has trained his officers to take command. -Cait Murphy
Top rank: 9 Johnson & Johnson
Rank in Pharmaceuticals: 2
From the common cold to clogged arteries, J&J has the remedy. The $61 billion company recorded operating margins of almost 25% last year. More broadly, the 122-year-old health-care conglomerate is admired for its ability to be competitive in three businesses -- consumer health products, branded pharmaceuticals, and medical devices.
That's nothing to sniff at. J&J's competitors have responded to uncertainty in health-care markets by narrowing their focus. -John Simons
Top rank: 10 Goldman Sachs Group
Rank in Securities: 1
At a time when much of Wall Street is begging for capital infusions, it's not a shock that Goldman Sachs, which posted record profits in 2007, earned a spot on this list.
But it's not just about the money. Goldman's peers admire it because the profits are more than a matter of luck (though there's some of that too). Its results are a testament to its culture, an impossible-to-replicate mix of extreme aggression, deep paranoia, individual ambition, and robot-like teamwork.
Even as Goldman has morphed from a U.S. banking partnership into a global colossus, the firm's culture has kept it as nimble as a startup. And that's helped it balance its greed with a hyper-awareness of risk. Sound too simple? Just ask Goldman's rivals. -Bethany McLean
Top rank: 11 Target
Rank in General Merchandisers: 2
Consumer jitters rattled retailers' nerves in 2007, and even mighty Target -- the $60 billion purveyor of cheap chic -- was unable to escape the gloom.
But while Target's 2007 numbers were lackluster -- same-store sales, a key measure of a retailer's health, fell in December, and profits fell in the fourth quarter -- the Minneapolis discounter kept its cool. Target continued to do what it does best: churn out trendy trappings with marketing mastery.
It also gave $3 million a week back to the community, boosting its image as the good guy of discount retailing. That helps explain why it jumped two spots this year, making it the top merchandiser on the list. -Julie Schlosser
Top rank: 12 Southwest Airlines
Rank in Airlines: 1
It was officially the second-worst year in aviation history. More than a quarter of all flights in the U.S. arrived late. Planes were packed. Airports were madhouses. Passengers were irate. So the fact that any airline is considered admirable says something.
Southwest, which dropped seven spots this year, to No. 12, shows it's possible to shine even in an otherwise dire industry. Besides posting its 35th consecutive year of profitability, it was the most punctual, lost the fewest bags, and had the least complaints compared with its peers. But its stock lagged, and there's fear that its quirky culture is starting to go stale. -Barney Gimbel
Top rank: 13 American Express
Rank in Megabanks, credit card cos.: 1
American Express was one of the few Wall Street giants to escape subprime trouble, but it still got whacked by the deteriorating economy. Investors had hoped AmEx would sail through the slowdown; instead the company announced (after our Most Admired survey was complete) that profits fell last quarter. The stock dropped, but that looks like a bump in the road, as the company has been a stellar performer for the past seven years under CEO Ken Chenault. -Geoff Colvin
Top rank: 14 BMW
Rank in Motor Vehicles: 1
The German automaker has doubled the number of models, expanded its global manufacturing -- and fallen on its face with the disastrous acquisition and subsequent divestment of Britain's Rover Group. Yet even as it has transformed its operations, BMW has strengthened its image as the sporty and cool German luxury-car brand. BMW's biggest challenge: to achieve margins as fat as those of rival Daimler. That would make BMW's shareholders as happy as its drivers. -Peter Gumbel
Top rank: 14 Costco Wholesale
Rank in Specialty Retailers: 1
Costco CEO James Sinegal is a stickler for keeping prices low. The savings he wrings from suppliers are often passed on to consumers, sometimes to the chagrin of investors. But the stock is up 12% over the past year, bucking the general retail trend. With $64 billion in sales (more than Wal-Mart's Sam's Club), a 50-million-strong membership base, and loyalty among hourly employees for its generous compensation, it's no wonder Costco (tied with BMW) has joined the ranks of the Most Admired Companies. -Suzanne Kapner
2 comments:
What is the criteria to assess these companies? Not sure I can agree with Apple being #1...Steve Jobs is apparently not a very nice guy to work with.
It's a very wide list tho, covering manufacturing, IT, automotive, banking, even retail.
Probably they should not be ranked no. 1 in computer as there are other computer manufacturers with better computer product than the Mac book. But with their iphone and ipad with own patented operating platform, they have somehow caught the whole world by their "balls" and became the "ONE". Until someone come out with something newer, looks like Steve's pocket is growing non-stop.... :)
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