Earnings ruled the day for the best performing stocks in the S&P 500 in April 2010, as many stocks blew past analyst consensus estimates or guidance, and also raised the earnings outlook for 2010.
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Whirlpool (NYSE:WHR) returned 25% to investors in April, 2010, and did it by beating analyst estimates on earnings and raising guidance for 2010. The company earned net income of $164 million, or $2.13 per diluted share, in the first quarter of 2010, almost double analyst estimates of $1.33 per diluted share.
Even better, Whirlpool raised guidance for 2010 to a range of $8-8.50 per share, compared to previous guidance of $6.50-7 per share. The company reported strength in sales in Asia, Brazil and even the United States, where it expects shipments to grow by 3-10% in 2010.
Akamai Technologies (Nasdaq:AKAM) also beat analyst estimates when it reported first-quarter of 2010 earnings, reporting 35 cents per share, compared to consensus estimates of 31 cents per share. The company also beat on the top line, reporting $240 million in revenue, compared to estimates of $230 million. The stock was up 24% for the month.
Banking on Finance
Two banks made the list of best performing stocks in April 2010. Zion Bancorp (Nasdaq:ZION) and Huntington Bancshares (Nasdaq:HBAN) returned 32% and 25%, respectively during the month.
Huntington Bancshares reported a surprise profit of 1 cent per share, compared to consensus estimates of a 15 cents loss in the first quarter of 2010. The bank showed improvement in several measures of credit quality, including a decline in net charge offs and non-performing assets. The bank also expects to be profitable in 2010.
Zion Bancorp didn't exactly turn in an earnings surprise, but the bank lost a whole lot less money than the street expected when it reported earnings for the first quarter of 2010. Zion Bancorp turned in a 57 cent per-share net loss, while analysts expected a loss almost twice as much.
Like Huntington Bancshares, the bank also saw an improvement in credit quality, with the provision for loan losses down for three consecutive quarters. Zion Bancorp also saw an improvement in net interest margin and strengthened capital ratios, indicating that the worst of the financial crisis may have passed.
The final name on the best performing list for April was Apartment Investment and Management Co. (NYSE:AIV), a real estate investment trust (REIT), which finished the month up 22%.
Apartment Investment and Management Co. didn't report earnings until the end of April, but saw its stock move higher all month, fed by some REIT sector upgrades and a general feeling by investors that the worst of the recession was past, and the group was in much better financial shape to face the upcoming recovery.
The Bottom Line
Earnings and a revised upward outlook for 2010 was the catalyst for many of the names on the list of the best performing stocks in April 2010. How far the earnings momentum will carry them is the question investors must ponder. (Thinking about a career in investment banking? Check out Top Things To Know For An Investment Banking Interview.)
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