How They Rated (charts):
* Microsoft
* Nokia
* Toyota Motor
* Intel
* Coca-Cola
* Sony
* General Electric
* Nike
* Citigroup

Microsoft’s main antitrust battle shifted from the United States to Europe this year, but the software giant remains steady in the REVIEW’s rankings of the world’s most admired companies. For the ninth straight year, the software giant tops our list, as readers ranked it No. 1 for long-term vision and No. 2 for financial soundness and as a company others try to emulate. Evidence: Revenues rose 13% to $32 billion in the year ended June 30, and operating income increased 11% to $13 billion. As to the vision thing, Microsoft pledged to invest a massive $6.8 billion in research and development in the current fiscal year. It’s gearing up for the release of Longhorn, the next generation of the Windows operating system, and promises to spend $750 million to build its position in China by 2005.

For the second straight year, Finnish phone-making giant Nokia is second in our rankings, and once again tops the list in innovation. The company will need every bit of that innovation to combat narrowing margins in the core mobile-phone business. Sales volumes have continued to grow–Nokia’s global hand-phone market share edged up to 39% by the end of September, from 36% a year earlier. But with prices falling and the infrastructure business still in the doldrums, Nokia is betting on all sorts of new initiatives, from next-generation video and content to cameraphones, in order to stay ahead. It puts plenty of its money to that use: The company spent $3.5 billion on research and development last year.

The world’s third-largest car maker, Japan’s Toyota Motor, is our top-rated Asian multinational, edging up two slots to No. 3 this year. While the tech giants ranked above it slog through the fallout of the computer and telecoms crashes, Toyota has been rolling. It predicts $7.2 billion in net profits this year, double the level of four years ago. The company now has a 10% share of the global car market and 11% of the American market. Toyota is a pan-Asian giant: It has assembly and production facilities in 12 Asian countries, including Japan. While Japan’s economy has struggled for nearly a decade and a half now, Toyota is an exemplar of what Japan Inc. can achieve: Our readers give it highest marks for long-term vision, where it ranks No. 3.

Chip-making giant Intel is another big gainer this year, moving up three slots in our rankings. The intense boom-bust of the chip cycle is one explanation. Last year, with chip prices in the doldrums, the firm’s ranking dropped. This year, prices started to rise again and Intel is back as well. A sign of the recovery: In the third quarter, Intel posted net profits double those of a year earlier. Its massive R&D commitment helps: Intel is reaping big benefits from the effort it put into developing Centrino chip packages–gear that powers laptops with wireless connections, for which demand is soaring.

Coca-Cola dropped one notch to No. 5, but for the second straight year, its marketing muscle led readers to rank it tops as the company others try to emulate. It’s a brand that may be the world’s most recognized, and its fortunes are a good measure of the economic health of the region. In Japan, a country where Coke still makes huge profits but where growth is slowing, the company is trying to keep its product mix up-to-date by adding new lines and new vending-machine strategies. But Coke is sizzling in other markets: Strong sales growth in several Asian countries, particularly China and Thailand, were solid contributors to its overall year.

It’s been a tough year for Sony, the world’s leading gadget maker, which drops three slots in our rankings to No. 6. The company has struggled to keep churning out hit products at the massive rate it did during the 1990s, and earnings were way down this year, with Sony turning a shocking $926 million loss in the January-March quarter. It has returned to profitability, but at levels lower than last year. But Sony is shooting to turn that around. It plans to reorganize production operations to boost profit margins to 10% in 2006, from 2.5% currently. And our readers certainly appreciate the company’s innovations: It was one of only three firms that ranked in the top 10 in four of our five categories. Microsoft and Nokia were the others.

This isn’t your parents’ IBM–the stodgy, starched-collar Big Blue. The company is moving ever further away from its mainframe-computer history, and our readers rank it highly, particularly for having long-term vision. IBM continues to beef up its services businesses, where it expects 60% of the technology industry’s profits to come from in the years ahead. Last year, it bought PricewaterhouseCoopers Consulting and Rational Software Corp., both moves aimed at expanding its services business. And among the world’s tech giants, it’s probably the furthest along in adopting the open-source Linux programming language.

GE is now two years into the Jeff Immelt era and our readers figure the sprawling conglomerate is in good hands. The company jumps back into the top 10 after dropping out last year, and readers rank it second only to Microsoft as a company whose management has long-term vision. As befits a group with business lines ranging from gas turbines to finance to entertainment, the year brought a range of news: In China, for instance, GE won enormous orders for turbines on the east-west gas pipeline and for jet engines to power the country’s new commercial-jet project.

The Nike marketing machine continued to race along this year, and our readers kept the company in the No. 9 slot. Here’s one broad-based measure of the global economic recovery: In the June-August period, Nike’s quarterly revenues topped $3 billion for the first time ever, up 8% on an adjusted basis from the year earlier. Here’s another: Nike set a record by paying a whopping $90 million endorsement deal to LeBron James, an American high-school basketball star, before he’d played a single game professionally. It lost out, however, to Reebok, which took Chinese star Yao Ming’s endorsement in October.

It was a year of change for the world’s widest-ranging financial group, most notably the ascension of Charles Prince to replace Sandy Weill as chief executive in July. Citigroup agreed to pay $400 million to settle charges brought by New York officials related to interactions between investment bankers and analysts during the telecoms boom. But business results bounced back with the American recovery, and the company jumped back into our top 10, up six slots from last year. In Asia, its Citibank unit tenaciously built its base in China with aggressive credit-card promotions.

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