24/7 Wall St.’s review of the IFI list finds that producing the most patents does not ensure a successful business — frequently, it can mean the exact opposite. These are the top 10 biggest patent producing companies for 2011.

Most of the corporations in the top 10 are among the most worst performers across all industries. Share prices of seven of them plunged more than 40% in 2011. Five of the companies also lost money last year. Hitachi and Panasonic, both in the top 10, each lost more than $1 billion.

Read: The Most Innovative Companies in the World

Of the top 10 recipients, only three are particularly successful companies. For years, they have held the largest market share in highly profitable businesses. Korean giant Toshiba has been extremely successful in consumer electronics, Microsoft (NASDAQ: MSFT) dominates the operating system market and IBM (NYSE: IBM) is the market leader in enterprise computing. These companies have been able to rely on their constant revenue streams to support heavy investment in research and development.

Some incredibly successful tech companies are not even in the top 25. Companies like Apple (NASDAQ: AAPL), which is only 39th on the list, have been extremely profitable as a result of a small number of highly successful products. Kodak (NYSE: EK) , meanwhile, is filing for bankruptcy, despite being one of the top patent recipients for years.

24/7 Wall St. reviewed top U.S. patent recipients for the past five years according to IFI’s annual reports. To illustrate how patent awards relate to company performance, we examined sales, profit and change in share price over the past five years for the top 10. We also examined how these companies compared within their industry and among the largest companies in the world based on the Forbes Global 2,000. Rankings for profit and sales are out of the largest 2,000 companies.

These are the 10 most innovative companies of the year.

The admission of the camera and medical equipment maker Olympus admitting large payouts around expensive mergers and hiding losses is just one more fly in the ointment after admitting that it was hiding investment losses.  The move is apparently close to $700 million in payments for financial advice and expensive acquisitions of companies not related to its core operations.  The news is almost certain to open its directors and accountants to criminal and civil suits.  A prior CEO was even fired for attempting to investigate a series of acquisitions made before his tenure.

Toyota Motor Corp. (NYSE: TM) said that profit was down almost 20% and it has missed its earnings estimates and withdrawn guidance after Thailand flooding has stopped work at three plants.  Toyota ADRs hit a 52-week low in New York of $63,53 and shares are currently down 2.3% at $63.95.  These ADRs for Toyota are now close to challenging the $60 or so low of early 2009 during the panic.  Honda Motor Co., Ltd. (NYSE: HMC) is down 1.8% at $29.97, but it is still about 6% above its 52-week low of $28.04.

We are looking at electronics and equipment exporters out of Japan as well.  Canon Inc. (NYSE: CAJ) and Hitachi Ltd. (NYSE: HIT) are both lower. Sony Corporation (NYSE: SNE) hit a new 52-week low of $17.26 and its ADR is close to challenging the lows of the panic of early 2009.  Panasonic Corporation (NYSE: PC) is down almost 3% at $9.02 also at a new 52-week low; but its shares are now lower than they were during the early 2009 panic selling.

Nomura Holdings Inc. (NYSE: NMR) is also following the slide as the accounting shenanigans are likely to ensnare Japanese securities companies due to widespread corporate governance and oversight issues in Japan.  The Japanese pound their securities firms when they worry about widespread corruption or widespread fraud as well.  Nomura ADRs are down about 9.5% at $3.32 in New York trading after hitting a 52-week low of $3.16 today and the ADR is lower than during the panic selling of early 2009.

The world is full of challenges as is, but when corporate officers are hellbent on mischief it just adds in yet one more pause for concern for the little investors.

JON C. OGG

The Justice Department sues to block AT&T (NYSE: T) buyout of T-Mobile. (Reuters)

Sony’s (NYSE: SNE) tablet PCs to be priced at $499 and $599, making it harder for them to challenge sales of the Apple (NASDAQ: AAPL) iPad. (Reuters)

A new lawsuit says Microsoft (NASDAQ: MSFT) tracks customer behavior without consent. (Reuters)

Japan regulators back merger of the LCD businesses of Sony, Toshiba and Hitachi (NYSE: HIT). (Reuters)

In an agreement with New York State, Goldman Sachs (NYSE: GS) to end robo-signing. (WSJ)

New data shows the rebound of the German economy continues. (WSJ)

Bank of New York’s (NYSE: BK) board pushes out CEO Robert P. Kelly. (WSJ)

Brazil’s central bank makes an unexpected rate cut. (WSJ)

Facebook adds new music services. (WSJ)

Apple criticized for its environmental practices in China. (WSJ)

The U.S. wastes as much as $60 billion on contracts during the Iraq and Afghanistan wars. (WSJ)

Banks working on T-Mobile deal buyout could lose $150 million in fees. (WSJ)

Switzerland greatly cuts the size of its stimulus package. (WSJ)

Eurozone inflation flat in August. (WSJ)

UnitedHealth (NYSE: UNH) buys a partnership of 2,300 doctors in California. (WSJ)

SEC seeks comments about the use of derivatives by mutual funds. (WSJ)

IMF and eurozone economists fight over bank balance sheet projections. (FT)

August junk bond deals at their lowest since 1995. (FT)

Sony says access to content will make its tablet PCs more attractive to consumers. (Bloomberg)

Douglas A. McIntyre

Bank of America (NYSE: BAC) knew of a suit by AIG (NYSE: AIG) since early this year, but did not disclose it. (Reuters)

Exxon Mobil (NYSE: XOM) and Russia’s Rosneft set a deal to seek oil and natural gas in the Arctic Circle area controlled by Russia. (Reuters)

A member of Congress says Irene relief must be offset by budget cuts. (Reuters)

Brent trades at $114 on hope of a U.S. stimulus package. (Reuters)

AT&T (NYSE: T) promises to add 5,000 jobs if its buyout of T-Mobile is approved. (Reuters)

Sony (NYSE: SNE), Toshiba and Hitachi (NYSE: HIT) to merge their small display units. (Reuters)

Hewlett-Packard (NYSE: HPQ) to resume making TouchPad tablets. (Reuters)

Bank of America to get out of the mortgage correspondent business. (WSJ)

The SEC to review certain Oracle (NASDAQ: ORCL) deals done overseas. (WSJ)

Traders in oil and other commodities may have to reveal details of their trades. (WSJ)

Fitch posts a warning about China’s banking system. (WSJ)

The National Labor Relations Board sides with unions in several recent cases, which draws criticism from some in Congress. (WSJ)

A demand by Finland for collateral before a bailout of Greece may still derail plans. (WSJ)

Nook sales help Barnes & Noble (NYSE: BKS) earnings. (WSJ)

Carl Icahn to sell his shares in Lions Gate Entertainment (NYSE: LGF).  (WSJ)

A new version of Boeing’s (NYSE: BA) 737 to be launched in 2017; the company says it has 496 commitments to purchase them. (WSJ)

EU banks raise $17.4 billion with an instrument similar to mortgage-backed securities. (WSJ)

The International Accounting Standards Board says some EU banks have not written down Greek loans enough. (WSJ)

Home builders may run out of capital as the housing market enters a fifth year of falling prices. (WSJ)

Ford (NYSE: F) to supply Zipcar autos for use on college campuses. (NYT)

US Bancorp (NYSE: USB) sues to block an $8.5 billion mortgage settlement from Bank of America. (FT)

Sony to release a line of tablet PCs to challenge Apple (NASDAQ: AAPL). (Bloomberg)

Douglas A. McIntyre

American International Group, Inc. (NYSE: AIG) Started as Neutral at Goldman Sachs.
Ariba Inc. (NASDAQ: ARBA) Reiterated Outperform at Credit Suisse.
Cabot Oil & Gas (NYSE: COG) Raised to Buy at Canaccord Genuity.
Carlisle Companies (NYSE: CSL) Reiterated Strong Buy as Value at Zacks.
CBOE Holdings, Inc. (NASDAQ: CBOE) Cut to Sell at Goldman Sachs.
Clorox Corporation (NYSE: CLX) Cut to UNderweight at Morgan Stanley.
Dendreon Corporation (NASDAQ: DNDN) Maintained Buy and $62 target at Needham.
eBay Inc. (NASDAQ: EBAY) Raised to Outperform at Pac-Crest.
Gap Inc. (NYSE: GPS) Cut to Equal-weight at Barclays.
Hitachi Ltd. (NYSE: HIT) Raised to Outperform at Credit Suisse.
Knight Capital Group Inc. (NYSE: KCG) Raised to Buy at Goldman Sachs.
Liberty Global, Inc. (NASDAQ: LBTYA) Raised to Outperform at Bull of the Day at Zacks.
Marvell Technology Group Ltd. (NASDAQ: MRVL) Started as Buy at Auriga.
Microsoft Corporation (NASDAQ: MSFT) Reiterated Hold at Argus.
Onyx Pharmaceuticals Inc. (NASDAQ: ONXX) maintained Buy but cut target to $48 at Canaccord Genuity.
Prudential Financial. Inc. (NYSE: PRU) Reiterated Outperform at Credit Suisse.
QuinStreet, Inc. (NASDAQ: QNST) Cut to Neutral at BofA/ML.
SunPower Corporation (NASDAQ: SPWRA) Cut to Underperform at Needham; Cut to Hold at Jefferies.
Verizon Communications Inc. (NYSE: VZ) Raised to Outperform at Oppenheimer.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

8.50 PM The Nikkei recovered some of its lost ground in early trading as fears about a reactor explosion receded. The DJIA recovered most of its early losses and ended near the day’s high.

11 AM The DJIA has sold down by 1.7%. Toyota is off nearly 4%. Sony is off 2.7%. GE off 3.3%

7.05  US DJIA futures indicate an open down 300 points after an 11% drop in Tokyo. GE (NYSE: GE), a key supplier of reactor infrastructure is down 9% in the premarket

3.15: The Japanese Nikkei fell 11% on top of 6.2% yesterday  Tokyo Electric Power, owner of the troubled reactors dropped over 24%

Japan has gone from what was bad to far worse over the weekend after Friday’s 8.9-magnitude quake that rocked Sendai and northeast Japan.  When we tallied up the damage on Friday and compared the damage to the 1995 Great Hanshin earthquake, or Kobe earthquake, we figured that the small drops being seen in the Japanese markets were not near enough.  It turns out that the drop was not just not enough.  It was a gross miss entirely as the Nikkei 225 fell a whopping 6.18% to 9,620.49 in Monday trading.

10:50 AM EST UPDATE: EWJ down -7.8% at $9.97; JEQ down -5.8% at $5.90; JOF down by -6.8% at $8.47; and DXJ down -7.7% at $35.31.  In pre-market the iShares MSCI Japan Index (NYSE: EWJ) is down 7.9% at $9.95.  The Japan Equity Fund Inc. (NYSE: JEQ) has yet to trade but is indicated lower by about 5% on first look; the Japan Smaller Capitalization Fund Inc. (NYSE: JOF) is down 6.4% at $8.51.  The WisdomTree Japan Hedged Equity (NYSE: DXJ) is down 3.25% at $37.00.  The fallout in individual ADR issues is enormous (priced updated as of 10:50 AM EST:

Sony Corporation (NYSE: SNE) is down 7.4% at $30.98, was down 8.3% at $30.65 in pre-market.

Toyota Motor Corp. (NYSE: TM) is down4.65% at $81.65, was down 6.5% at $80.10 in pre-market.

Honda Motor Co., Ltd. (NYSE: HMC) is down 4.3% at $38.02, was down 5.9% at $39.74 in pre-market.

Hitachi Ltd. (NYSE: HIT) is down 14.3% at $50.68, was down 12.9% at $51.48 in pre-market.

Kyocera (NYSE: KYO) is down 5.15% at $93.12, was down 8.2% at $90.13 in pre-market.

NTT DOCOMO, Inc. (NYSE: DCM) is down 4% at $17.55, same as pre-market coverage.

Internet Initiative Japan Inc. (NASDAQ: IIJI) is down 14.55% at $6.25, was down 10.8% at $6.52 in pre-market.

Canon Inc. (NYSE: CAJ) is down 4.6% at $43.39, was down 6.3% at $45.52 in pre-market.

• Nuclear Power ambitions being killed globally
• Solar wins as nuclear dies
• An earthquake in San Francisco could cost us $390 billion

It is more than difficult to focus solely on the economic impact of tragedy when the death toll is rising and when there is a risk of a total meltdown of a nuclear reactor.  The consensus has now come around that this damage will definitely hit Japan’s GDP in the quarters ahead.

JON C. OGG

Update:

Preliminary estimates for the cost of the 8.9 magnitude earthquake are as high as $35 billion, and the effects of the tsunami could cause that to grow

According to research firm AIR Worldwide:

Given the enormity of the Mw9.1 earthquake that struck Japan less than two days ago, it is still in the very early aftermath of the event. Search and rescue efforts are still underway and damage assessment has only just begun, while considerable uncertainty still remains in the parameters that define the event.

Based on currently available information, AIR estimates that insured property losses from Friday’s earthquake will range between 1.2 trillion JPY to 2.8 trillion JPY. Using today’s exchange rate of 81.85 JPY to the dollar, this translates to a range of between 14.5 billion USD and 34.6 billion USD. To obtain this preliminary range, AIR simulated dozens of scenarios with varying magnitude (8.9 to 9.1), focal depth (15 km to 30 km) and rupture width (100 km to 150 km). The losses are most sensitive to rupture dimensions, and become extremely large if the modeled rupture is extended southward towards the Tokyo and Chiba prefectures, which contain a higher concentration of insured properties.

Oddly enough, public safety experts have begun to argue about whether that the Japanese seawalls have been built high enough over the last several years or whether the building code was stringent enough. Japan has spent tens of billions of dollars on seawalls to block tsunami waves since the Kobe quake.

Countries can hardly base public spending on 100 year events, and certainly not on 1,000 year ones. That may be tragic for victims, but earthquake public policy in a nation like Japan could cause a financial crisis comparable in its own way to the earthquake.

Douglas A. McIntyre

And while the deal seems to make sense, there could be a couple of issues. First, there’s a chance that the deal could run into some antitrust questions. Second, the deal may not be keeping step with where the storage market is going.

The other major players in disk drives are Toshiba Corp. (OTC: TOSBF), which took over the disk drive business of Fujitsu Ltd. (OTC: FJTSY) in October 2009, and Samsung Electronics. Toshiba has nearly 11% of the global market and Samsung has nearly 10%. Western Digital will have 48.4% following the acquisition of Hitachi, and Seagate has about 30%.

Seagate faces an uphill struggle if it seeks to turn the disk drive business into a two-horse race. The company already has about $2.4 billion in long-term debt, and it failed to put together a deal last year that would have taken the company private for the second time.

Western Digital expects to increase its debt by about $2.5 billion as a result of the Hitachi acquisition. But its long-term debt now is a mere $294 million. Adding to debt doesn’t make analysts and investors happy.

The antitrust problems could come because Hitachi priced its products aggressively. By removing one of the main threats to price competition, Western Digital can buoy its own profits, and, by accident, Seagate’s. Neither Toshiba nor Samsung can price as aggressively as Hitachi, because each is too small to threaten the scale economies of either Western Digital or Seagate. Of course, Toshiba and Samsung could merge, but that hasn’t even been rumored.

Another possible headwind for Western Digital is the growth of the tablet market, which threatens to put the brakes on growth in the demand for laptops. Tablets use flash memory from companies like SanDisk Corp. (NASDAQ: SNDK), Nvidia Corp. (NASDAQ: NVDA), and Marvell Technology Group Ltd. (NASDAQ: MRVL), among others.

Western Digital has led the drive makers in the market for 2.5-inch drives designed for laptops and portables. As that market’s growth is challenged by tablets, the company will have to turn customers to using external disk drives that are capable of storing large video and music files. Western Digital has long had very good luck selling its drives in retail packages, and this would seem to play to one of their strengths.

Unfortunately for Western Digital, the world seems to be heading toward streaming video and music — renting entertainment rather than owning it. In that market, which comprises mainly cloud-based servers, Seagate has the upper hand.

So far today, though, the merger is ringing everyone’s bells. Western Digital shares are up about 14%, to $34.02, within a 52-week range of $23.06-$45.09. Seagate’s shares are up about 10%, to $13.56, within a 52-week range of $9.84-$20.90.

Paul Ausick

A variety of other uranium and nuclear-based companies have really outperformed USEC over the past 12 months. Uranium Resources, Inc. (NASDAQ: URRE), Ur Energy Inc. (NYSE: URG), Uranerz Energy Corp. (NYSE: URZ), and Uranium Energy Corp. (NYSE: UEC) have all posted share price gains of more than 50% in 2010. Uranium Resources’ shares gained about 300% in the past 12 months.

USEC is counting heavily on a $2 billion loan guarantee from the US Department of Energy for construction of its American Centrifuge Plant. Without the loan guarantee, USEC “will not continue spending on the project.” The company tentatively plans to spend $50 million in the first quarter of 2011.

The company’s fragmentary guidance for 2011 is pushing the share price down this morning. USEC said it expects 2011 revenue of $1.7 billion, well below previous analysts’ expectations of $2.01 billion. USEC expects a decline of 10% in sales and a “significant” decline in revenue related to decommissioning the gaseous diffusion enrichment plant at Portsmouth, Ohio.

USEC also did not offer guidance for earnings or cash flow from operations. The company did say, however, that “we expect to report a net loss for the year.” USEC expects gross profit in 2011 of $70-$80 million, and SG&A expenses of about $60 million. Add to that the anticipated expenditure of $50 million in the first quarter for the centrifuge plant, and the red ink really starts to flow.

It could be that USEC is just in the wrong part of the uranium/nuclear industry. Canadian miner Cameco Corp. (NYSE: CCJ) even posted a larger share price gain in the last 12 months than did USEC. Reactor builders like France’s Areva or GE Hitachi Nuclear Energy, a joint venture between Hitachi, Ltd. (NYSE: HIT) and General Electric Co. (NYSE: GE), are having far better luck cashing in on the new interest in nuclear power generation plants.

The Global X Uranium ETF (NYSE: URA) has also performed better in its short life than USEC, though 4.05% of URA’s holdings are USEC stock. URA’s largest holding is Cameco, which represents 17.57% of the ETF’s holdings, and its top four holdings, accounting for more than 50% of the ETF’s total assets, are miners. Digging uranium out of the ground or building nuclear generation plants is where the value is, not in enriching uranium fuel.

USEC’s shares are trading down nearly -7% at around noon today, at $5.23, within the stock’s 52-week range of $3.90-$6.50. Volume is about three times the daily average.

Paul Ausick

The Nikkei rose a fraction to 12,992. Hitachi (HIT) fell 2.3% to 718. NTT (NTT) fell 1.7% to 461000.

The Hang Seng dropped 2% to 23,120. China Life (LFC) dropped 3.7%to 29. China Petroleum (SNP) fell 5.3% to 6.05.

The Shanghai Composite fell 2.3% to 4,335.

Data from Reuters

Douglas A. McIntyre

The Nikkei fell ,7% to 13,497. Hita hi (HIT) rose 1.5% to 807. KDDI fell 5.2% to 681000.

The Hang Seng moved up 2.9% to 24,124. China Life (CHL) rose 5.4% to 29.5. PetroChina (PTR) rose 6.9% to 11.45.

The Shanghai Composite moved down 1.4% to 4,321.

Data from Reuters

Douglas A. McIntyre