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Tickers in this Article: TYC, AZN, CEPH, DRIV, ESRX
Although it seems that every day we are hit with negative data points on the economy, it's not all bad news out there. In fact, some companies are actually doing well and have exceeded earnings guidance in the current quarter.

The businesses these companies are in range from technology to pharmaceutical/biotechnology to pharmacy benefit managers. The list even includes an old-line conglomerate that was tarred with scandals back in the early part of the decade. Let's take a look at which companies are thriving in this tough market.

Tyco Tough
The first company is Tyco International (NYSE:TYC), which reported fiscal third-quarter earnings of $0.88, beating guidance by $0.21. The company raised full-year EPS to a range of $2.97-2.99 compared to previous guidance of $2.76.

Tyco is a conglomerate, and has a range of businesses including alarm monitoring, fire protection and detection products and services, valves and controls, and other industrial products. Tyco was involved in an accounting scandal several years ago; Dennis Kozlowski, the former CEO, and Mark Swartz, the former CFO, were both sent to prison. (If you're interested in reading about other corporate scandals, check out The Biggest Stock Scams Of All Time.)

The company had strong operating income growth in all segments and many of its businesses are fairly basic and stable. It does use large amounts of steel in its industrial businesses, and although prices were much higher for this key input, Tyco was able to offset these with higher pricing.

AZN Shows Its Health
AstraZeneca
(NYSE:AZN) reported second-quarter earnings of $1.25, beating guidance by $0.17. The company raised guidance for full-year EPS to a range of $4.60-4.90, compared to previous guidance of $4.46. AstraZeneca is a pharmaceutical company specializing in gastrointestinal, cardiovascular, respiratory and other areas.

The company cited "good operational and financial performance and further currency benefits realized in the year to date" for the strong results. Also, Q2 sales were up in the emerging markets by 20% and surpassed $1 billion for the first time. Sales in China were up 29%.

Cashing In on eCommerce
Digital River
(Nasdaq:DRIV) is a technology company that provides outsourced eCommerce solutions to its customers. The company reported second-quarter EPS of $0.37, beating guidance by $0.04. Digital River raised third-quarter guidance by $0.03 to $0.47, and 2008 EPS to $2 from $1.90. Although the company saw "strong growth along small- to mid-sized publishers, particularly in Asia/Pacific", revenues here were flat, meaning that the 26% jump in revenues was based on strong domestic operations. (For more on what beating expectations can mean for a stock, read Surprising Earnings Results.)

ESRX Writes Up Strong Results
Express Scripts
(Nasdaq:ESRX), the pharmacy benefit manager, reported second-quarter EPS of $0.76 - that's $0.04 ahead of expectations. Full-year guidance was raised to a range of $3.03-3.10 from $3. The company attributed the strong results to market share shifts from high-cost products to lower-cost generics, which increased margins. Generics now have a market share of 65.9%, up from 61.8% last year.

CEPH Discovers Strong Q2
Cephalon
(Nasdaq:CEPH) reported second-quarter EPS of $1.25, which was $0.18 ahead of expectations. The third quarter was raised to a $1.25-1.35 range, compared to previous guidance of $1.22. Cephalon is a biopharmaceutical company that focuses on dugs to treat central nervous system disorders, pain, cancer and addiction. The company cited strong sales of Treanda, a chemotherapy drug, and Amrix, a muscle relaxant.

Common Denominators
Do these companies have something in common that makes them less susceptible to what is plaguing the rest of the market?

Three of them (ESRX, CEPH and AZN) are in the healthcare field, which tends to make revenues a little more stable and recession-proof. Four of them have no exposure to rising raw material costs like oil, natural gas, iron ore, steel or feed. Tyco, the only one that did have exposure, was able to offset rising raw material costs with strong pricing power. Only one, AZN, cited strong sales in emerging markets as the reason for its recent success. None of these companies is in the financial sector, where companies hold billions in impenetrable and hard-to-value assets on their balance sheets. (For more on financial condition analysis, see Fundamental Analysis: The Balance Sheet.)

Not all companies are doing poorly in the current environment. Although this is a tough market for any investor, it's possible to make money by avoiding sectors with obvious problems, like financials, or ones that lack the pricing power to offset rising raw material costs.

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