World's Most Admired Companies 2010

Apple
Top 50 rank: 1
Rank in Computers: 1
(Previous rank: 2)
Overall score: 7.95

Why it's admired

Steve Jobs does it again: Apple is keeping its Most Admired crown for the third year in a row.

With 250 million iPods, 43 million iPhones, and 32 million iPod touches sold to date, plus the promise of a game-changing iPad, Apple won this year's vote by the highest margin ever for a No. 1. Two more years as champ and Apple will match GE for most appearances in the top spot.

What makes Apple so admired? Product, product, product. This is the company that changed the way we do everything from buy music to design products to engage with the world around us. Its track record for innovation and fierce consumer loyalty translates into tremendous respect across business' highest ranks.

As BMW CEO Norbert Reithofer puts it, "The whole world held its breath before the iPad was announced. That's brand management at its very best." --Christopher Tkaczyk

Google
Top 50 rank: 2
Rank in Internet Services and Retailing: 1
(Previous rank: 1)
Overall score: 7.70

Why it's admired

Google is increasingly squaring off against Apple, so it's fitting that the search engine giant climbs into the no. 2 slot this year, notably edging past Warren Buffett's Berkshire Hathaway.

The tech behemoth -- its revenues were $23.6 billion last year -- continues to dominate search on the web and attract the smartest designers and engineers. Meanwhile YouTube, long disparaged by critics as a money-loser, has started showing signs of major growth potential and analysts expect it will become profitable in the coming year.

But all eyes are on the Android OS for smartphones, to see how seriously it will challenge Apple's iPhone in the hotly competitive world of mobile devices. Watch this space next year. --C.T.

Berkshire Hathaway
Top 50 rank: 3
Rank in Insurance: Property and Casualty: 1
(Previous rank: 1)
Overall score: 7.12

Why it's admired

Warren Buffett's legendary investing genius and seemingly clairvoyant understanding of markets has kept his firm (which includes holdings in insurance, retail and energy, among others) a perennial favorite among executives.

Last year Buffett made news again when he announced Berkshire would make its biggest-ever acquisition, Burlington Northern Santa Fe for $26 billion. When the deal closed in February, Berkshire replaced the railroad on the S&P 500.

Berkshire's class A and B shares have been some of the best-performing stocks ever, last year increasing in book value by 19.8%. That's less than the 26% the S&P returned, but in his much-anticipated annual letter to shareholders last month, Buffett explained that while Berkshire has in some years lagged the index when the overall market gained, "We have consistently done better than the S&P in the eleven years during which it delivered negative results. In other words, our defense has been better than our offense, and that's likely to continue."

In fitting form, he closed with a quip after inviting shareholders to attend his annual meeting: "P.S." he wrote. "Come by rail." --C.T.

Johnson & Johnson
Top 50 rank: 4
Rank in Pharmaceuticals: 2
(Previous rank: 1)
Overall score: 6.67

Why it's admired

Survey respondents cheered J&J's banner year in 2008, which made it one of the most profitable companies in the Fortune 500 (earnings grew 22%, while the Fortune 500's profits dropped 85%). They also celebrated its stock performance the past few years, when the health-care giant consistently beat the S&P.

But the troubled economy brought sluggish sales last year, and J&J was forced to lay off 7,000 employees in November.

Even so, thanks to continued innovation and an overhaul of its pharmaceutical business, the company continued to win admiration. It also rewarded shareholders, increasing dividends as its stock climbed nearly 32% in the past 12 months. --C.T.

Amazon.com
Top 50 rank: 5
Rank in Internet Services and Retailing: 2
(Previous rank: 2)
Overall score: 7.39

Why it's admired

What a show! The Internet retail giant makes a triumphant debut on the list this year at No. 5 as continued growth, strong sales in the recession, and the early success of the Kindle won Jeff Bezos the respect of our voters.

While Amazon doesn't publicly disclose product sales figures, the company claims millions of the electronic media readers have sold, and that it now sells six Kindle e-books for every 10 printed books.

That early success will soon be challenged by Apple's forthcoming iPad, of course, but Amazon's innovation and leadership in 2009 were more than enough to win Big Business's high esteem. --C.T.

Procter & Gamble
Top 50 rank: 6
Rank in Soaps and Cosmetics: 1
(Previous rank: 1)
Overall score: 7.94

Why it's admired

In one of the most-watched CEO handoffs ever, Robert McDonald took the reins from mentor A.G. Lafley in July. Under Lafley, the conglomerate was admired for its innovation and focus on the consumer. Now, new CEO McDonald has announced plans to introduce dozens of new lower-cost products in the U.S. and abroad, hoping to capitalize on recession-weary shoppers looking for discounts.

The company has innovated in the recession, too, introducing products like a new $45 skin care line under the Olay brand and higher-end diapers in Europe.

McDonald told Fortune that when it comes to earning the respect of the business community, though, the traits he thinks are most important are predictability and consistency. "I often joke, if you call me a boring leader. That's a compliment." --C.T.

Toyota Motor
Top 50 rank: 7
Rank in Motor vehicles: 3
(Previous rank: 2)
Overall score: 5.20

Why it's admired

Surprised to find Toyota on our list? Not only did the troubled car maker make the top 50, but at No. 7 it's the highest-rated foreign company. What gives?

Our surveys were completed in the fall and winter -- most were received after Toyota's October recall of floor mats, but well before the gas-pedal crisis escalated to epic proportions in January. At the time of the polling, Toyota reaped the benefits of its legendary reputation for quality leadership and from its continued growth as U.S. car companies suffered; in 2008, the company surpassed General Motors as the world's largest automaker.

Even with that polling schedule, Toyota fell four spots from last year's list. The true test will be how it fares next year.

If history is any guide, it has a rough road ahead. When Merck recalled its arthritis drug Vioxx in 2004 after a clinical trial confirmed that it increased the risk of heart attacks, the pharmaceutical giant fell off our America's Most Admired Companies list the following year. It has yet to return

Rank	Company
1	Apple
2	Google
3	Berkshire Hathaway
4	Johnson & Johnson
5	Amazon.com
6	Procter & Gamble
7	Toyota Motor
8	Goldman Sachs Group
9	Wal-Mart Stores
10	Coca-Cola
11	Microsoft
12	Southwest Airlines
13	FedEx
14	McDonald's
15	IBM
16	General Electric
17	3M
18	J.P. Morgan Chase
19	Walt Disney
20	Cisco Systems
21	Costco Wholesale
22*	BMW
22*	Target
24	Nike
25	PepsiCo
26	Starbucks
27	Singapore Airlines
28	Exxon Mobil
29	American Express
30	Nordstrom
31	Intel
32	Hewlett-Packard
33	UPS
34	Nestlé
35	Caterpillar
36	Honda Motor
37	Best Buy
38	Sony
39	Wells Fargo
40	eBay
41	Nokia
42	Samsung Electronics
43	Deere
44	L'Oréal
45	AT&T
46	Lowe's
47	General Mills
48	Marriott International
49	DuPont
50	Volkswagen

-  Fortune, the March 22, 2010 issue