Each January, 24/7 Wall St. forecasts the publicly traded U.S. companies that will have the highest profits in the year ahead. This year, Apple (NASDAQ: AAPL) is likely to pass Exxon Mobil (NYSE: XOM) as the most profitable corporation in the Fortune 500. It already passed the oil giant in market capitalization for a while last year. The market appears to anticipate rapid growth from Apple comparable to that of the past two years. The stock has reached several all-time highs recently and now trades at $425, up nearly 25% in the past year.

Most of the largest companies in the U.S. will not have large earnings swings from last year, with the notable exception of financial firms. The majority of banks and investment houses will suffer earnings declines because of poor trading results and bad loans, notwithstanding the fact that JPMorgan Chase (NYSE: JPM), arguably the best-run bank in America, is on this list, as is Wells Fargo (NYSE: WFC) . Corporations like IBM (NYSE: IBM) and Procter & Gamble (NYSE: PG) have such huge customer bases worldwide that they can hardly outperform the global economy. What differentiates them is their ability to manage their operations better than peers as they keep expenses low and take all the advantages they can of their significant market shares.

24/7 Wall St. looked at the top 200 companies in the Fortune 500 based on the revenue in the past reported year. We then reviewed earnings and earnings forecast from Thomson/First Call. There were some cases in which earnings appeared to be too low or too high because of events in the past month. We took those into account when we produced the final numbers.

This is 24/7 Wall St.’s 10 Most Profitable Companies for 2012.

10. (tie) Wells Fargo
> Forecast 2012 revenue: Flat at $80 billion
> Forecast 2012 earnings: $14 billion, up 14%
> Stock price: $29.34
> Range: $29.00 – $29.38
> Market cap: $154.57 billion

Wells Fargo is one of a few large U.S. banks that has only modest exposure to mortgage problems. Because of its buyout of Wachovia, however, it is involved in some of the government lawsuits regarding mortgage fraud. Wells Fargo does not have a large investment bank, so it will not suffer from the downturns in trading and M&A that have hurt other financials. Wells Fargo is the second largest bank in the U.S. by deposits and one of the largest credit card issuers.

10. (tie) Proctor & Gamble
> Forecast 2012 revenue: Flat at $90 billion by 4%
> Forecast 2012 earnings: $14 billion, up 9%
> Stock price: $66.64
> Range: $66.22 – $66.75
> Market cap: $183.35 billion

Procter & Gamble remains the world’s largest consumer products company. The company, which operates in 180 countries, owns global brands such as Tide, Charmin, Bounty and Cascade. P&G claims it has 24 brands worth $1 billion each. It also says its products reach 4.4 billion people a day. Compared to competitors such as Colgate (NYSE: CL), P&G’s size, brands and balance sheet give it a number of advantages, including access to capital at low rates and brand equity. For some of P&G’s products, brand equity has been built up over several decades.

10. (tie) Johnson & Johnson
> Forecast 2012 revenue: $68 billion, up 5%
> Forecast 2012 earnings: $14 billion, up 6%
> Stock price: $64.84
> Range: $64.41 – $65.09
> Market cap: $177.07 billion

Johnson & Johnson’s (NYSE: JNJ) troubles in recent years primarily consisted of a number of massive recalls of its over-the-counter drugs. The recalls have not only hurt sales, but the company’s reputation as well. Fortunately, J&J is diversified enough that its many other products compensated for the lost sales. One of J&J’s large divisions is its medical device product line, which includes heart devices, joint replacements and diabetes treatments. Another large division handles R&D and the manufacturing of pharmaceutical drugs.

9. Berkshire Hathaway
> Forecast 2012 revenue: $136 billion, flat
> Forecast 2012 earnings: $15 billion, up 13%
> Stock price: $114,060.00
> Range: $114,000.00 – $115,088.00
> Market cap: $188.66 billion

The great “Warren Buffett Mutual Fund Company” houses so many businesses and stock positions that it is difficult for analysts to estimate future numbers. The fact that it owns one of the largest railroads in the country — Burlington Northern — gives earnings some predictability. But Berkshire Hathaway (NYSE: BRK-A) also owns a number of financial services and insurance operations, for which earnings are less predictable. The same is true of Berkshire Hathaway’s exceptionally large stock portfolio, which includes many blue ribbon companies among its holdings.

8. IBM
> Forecast 2012 revenue: $110 billion, 2%
> Forecast 2012 earnings: $16 billion, up 11%
> Stock price: $181.07
> Range: $180.27 – $182.27
> Market cap: $213.41 billion

IBM is now, by many measures, the largest technology company in the world, having surpassed Hewlett-Packard (NYSE: HPQ) in revenue last year. IBM’s advantages are twofold. The first is that it has diversified well beyond its core hardware base. While mainframes are still among the largest contributors to IBM’s revenue, the company sold its lower margin PC business to China-based Lenovo. The bulk of IBM’s sales currently come from high margin software and IT consulting. Management has also become adept at cost controls — IBM’s second advantage point, especially when it comes to earnings.

7. Walmart
> Forecast 2012 revenue: $460 billion, up 3%
> Forecast 2012 earnings: $17 billion, up 9%
> Stock price: $59.14
> Range: $58.92 – $59.55
> Market cap: $202.54 billion

Walmart (NYSE: WMT) remains the world’s single largest company by sales, outside the oil industry. And with nearly 2 million workers, it may also be the largest employer. The retailer’s growth has stalled in the U.S., but that has largely been offset by improvements in emerging markets, which include Mexico and China. Walmart plans to try to regain some of its market share in the U.S. by further promoting its low prices and by opening more modest sized stores in urban areas.

6. Chevron
> Forecast 2012 revenue: $261 billion, up 3%.
> Forecast 2012 earnings: $18 billion, up 5%
> Stock price: $109.39
> Range: $108.33 – $109.44
> Market cap: $217.91 billion

Chevron’s (NYSE: CVX) 2012 fortunes will rely to a large extent on the price of oil. Most analysts believe that Brent crude will stay well above $100 because of political unrest in northern Africa and Iran. Demand may also rise because of a slight improvement in GDP in the U.S. and ongoing growth and energy demand in China. Chevron and most of its peers trade near 52-week highs, a sign there’s much enthusiasm about  the prospects of Big Oil.

5. JPMorgan Chase
> Forecast 2012 revenue: $100 billion, flat
> Forecast 2012 earnings: $19 billion, up 9%
> Stock price: $35.29
> Range: $34.99 – $35.68
> Market cap: $134.09 billion

JPMorgan is not as burdened with mortgage woes like Citigroup (NYSE: C) and Bank of America (NYSE: BAC). Its shares have appropriately outperformed those of the other two financial firms over the past six months. JPMorgan’s challenge will be to keep its consumer banking operation healthy because its investment bank and trading operations are likely to post mediocre results in 2012.

4. Microsoft
> Forecast 2012 revenue: $80 billion, up 8%
> Forecast 2012 earnings: $23 billion, up 12%
> Stock price: $27.81
> Range: $27.73 – $28.10
> Market cap: $233.94 billion

Microsoft (NASDAQ: MSFT) is often criticized because of the stock’s abysmal performance in the past decade. But with expected strong results for 2012, the direction of the share price may change. The Windows PC, Business, and Server franchises are still widely profitable. The open questions are mostly tied to Microsoft’s search engine operations and its mobile smartphone handset business, which is now part of its joint venture with Nokia (NYSE: NOK).

3. AT&T
> Forecast 2012 revenue: $127 billion, up 2%
> Forecast 2012 earnings: $22 billion, up 5%.
> Stock price: $29.59
> Range: $29.50 – $29.85
> Market cap: $175.29 billion

AT&T’s (NYSE: T) sales and earnings are a tale of two companies. The company’s wireless business, driven by the increasing use of data application and the expansion of new 4G superfast networks, continues to grow. But AT&T’s plan to further expand its wireless division was thwarted when the government blocked a deal to buy T-Mobile, the number four wireless firm in the U.S. The company’s traditional landline home phone service business, however, has continued to shrink as more people rely on VoIP and cell service.

2. Exxon Mobil
> Forecast 2012 revenue: $450 billion, down 7%
> Forecast 2012 earnings: $28 billion, down 3%
> Stock price: $85.49
> Range: $84.97 – $85.64
> Market cap: $409.77 billion

Exxon Mobil is the world’s largest oil company. Both its refining and exploration operations contribute equally to earnings. Exxon has also begun to move into the lucrative and rapidly growing oil sands business. The new competition in that business is as much from China as anywhere else. PetroChina (NYSE: PTR) has begun to aggressively acquire operations in oil sands centers like Canada. The biggest variable in Exxon’s earnings will be the price of oil. Most experts peg that above $100 for the balance of the year.

1. Apple
> Forecast 2012 revenue: $160 billion, up 48%
> Forecast 2012 earnings: $33 billion, up 60%
> Stock price: $422.76
> Range: $421.35 – $427.75
> Market cap: $392.92 billion

Apple’s earnings and sales growth continue to defy gravity. Apple should continue to hold wide leads over the competition, according to much of the research bout the smartphone and tablet PC industry. Apple is able to charge a premium for its products over those of its competitors like Samsung and HTC, which drives its impressive gross margins. Apple also stands to benefit from its current low market penetration in developing nations such as China, which will improve as 3G networks are more broadly deployed.

Douglas A. McIntyre

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