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Tickers in this Article: AMAT, HNZ, CPB, CAG, HPQ
When a company raises its revenue or earnings guidance, it can cause a positive chain of events. For instance, the news might attract traders. It also might cause analysts to raise their estimates. With that in mind, today we will touch on Applied Materials (Nasdaq:AMAT) on the heels of its recent quarterly guidance.

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Raising The Earnings Bar
Shares of chip manufacturing equipment maker have had a nice run, like many other tech stocks over the past year. The company has raised eyebrows as it has met or beat expectations in the last three quarters. And this past week, the company drew attention to itself after it said it is looking for revenue to increase 60% in fiscal 2010. That's up nicely from the 50% increase the company had been looking for. Again, the release could cause analysts to ratchet expectations higher.

The company is attractive from an investment standpoint. As the economy heats up, so will the company's bottom line. Right now Wall Street analysts expect the company to earn 70 cents this year and $1.11 next year. Those numbers may end up being slightly conservative. In any case, even though the company isn't cheap on a price-to-expected earnings basis in excess of 19 times this year's estimate, it isn't unreasonable either given the lofty growth that is expected.

Others On The Radar Screen
While Heinz (NYSE:HNZ) and its foothold in food may not be a sexy tech story, it deserves a mention here nonetheless. In February, the Pittsburgh based company offered an outlook for 2010 of $2.82 to $2.85. This drew attention because it was expecting $2.72 to $2.82 a share at one point.

As the economy improves I see families spending more money at the supermarket which seems like it could really give Heinz and other companies of its ilk, like ConAgra (NYSE:CAG) and Campbells (NYSE:CPB), a boost on the earnings front. As things stand right now, Wall Street is expecting the company to earn $2.86 a share this year and $3.12 in 2011. Those numbers seem quite doable and yours truly believes the stock is worth somewhere in the upper $50 range.

The tech giant Hewlett Packard (NYSE:HPQ) came out in its first quarter release and offered an upbeat outlook for the year. Specifically it said:

HP estimates full year fiscal 2010 revenue will be approximately $121.5 billion to $122.5 billion, up from its previous estimate of $118.0 billion to $119.0 billion. HP expects full year fiscal 2010 GAAP diluted EPS to be in the range of $3.79 to $3.86, up from its previous estimate of $3.65 to $3.75, and non-GAAP diluted EPS to be in the range of $4.37 to $4.44, up from its previous estimate of $4.25 to $4.35.

This caught my eye in a big way. Although to be clear, I was a bull regardless. The reasons are simple. One, the company has its hands in items that we would have trouble living without like desktops and laptops and computers. Two, in spite of tough competition and a difficult operating environment it has beat estimates in the last three quarters, which deserves attention. If the company can meet its aforementioned guidance I think the shares could head to the $60s.

Bottom Line
Companies that raise the revenue bar or earnings bar tend to pique my interest. In short, each of the above companies has fairly recently done that and deserves some attention. Of the three companies, Heinz is my favorite. With a great name, an excellent foothold in food and solid earnings potential, I see nice upside potential for the stock from the current level. (For more, see Can Earnings Guidance Accurately Predict The Future.)

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