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The Most Surprising Early Earnings Surprises
If Alcoa's (NYSE: AA) earnings "beat" for Q2 was the shot heard around the investing world, then CSX Corporation's (NYSE: CSX) was the second wave of the attack. The former earned 13 cents per share, rather than the anticipated 11 cents. It was a complete reversal from a loss a year ago. The latter earned $1.07 (up 36% YOY) versus the expected 98 cents. Both companies also announced they were looking for similar growth going forward.
But those surprises are hardly still "news", right? After all, all eyes were on those two industrial names - especially Alcoa - as cues of what's really going on with the economy.
If you dig deeper into the earnings report card, though, the surprises get more, well, surprising - but not necessarily for the better. Check out some of the less-touted surprises that are just as telling about the state of corporateAmerica
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More Than Just A Modest Turnaround
The swing back to a profit was impressive enough. The fact that chipmaker Novellus Systems (Nasdaq: NVLS) topped analysts' per-share earnings expectations of 60 cents by posting a profit of 66 cents per share is just icing on the cake. That's not even the most amazing part of all, though.
Revenue soared by 170% for Novellus last quarter. CEO Richard Hill also mentioned that he expected to see more growth going forward. And while the triple-digit growth rate may not be repeatable, current demand levels - fueled by upgrades in communication infrastructure, public sector IT investments andChina
Four In A Row
It seems as if the regional banks are looking more and more attractive every day. Bank of the Ozarks (Nasdaq: OZRK) layered on another pro-regional argument with last quarter's 14.6% increase in net earnings. The operating EPS of 76 cents was a mere 35% higher than the estimated 56 cents.
It was also the fourth earnings beat in a row, leaving one to wonder when the pros will figure out just how much of a profit bulldozer Bank of the Ozarks is.
Money Well Spent
Good luck figuring out Audiovox's (Nasdaq: VOXX) income statement for last quarter. Operating expenses were up, but largely due to acquisitions and employee stock option expenses. On the flip side, those expenses were more than offset by some savvy foreign currency exchange hedges and a tax benefit.
Either way, the electronics maker cranked up Q2 revenue by 8.8% and improved EPS from 2 to 5 cents - even if it was all acquisition-based. Better still (and impressive), the cash position has improved despite the acquisitions.
In other words, Audiovox is getting a serious ROI on what was viewed as a risky strategy a few months ago.
Connected Dots
Double dip recession? (Learn more, see Recession: What Does It Mean To Investors?) You never really know, but considering two of the three earnings surprises discussed above were from more "discretionary and cyclical" companies, and light on the "non-cyclical" scale, it's hard to argue that consumers are pinching pennies. The CSX and Alcoa news is just more evidence of the same idea.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
But those surprises are hardly still "news", right? After all, all eyes were on those two industrial names - especially Alcoa - as cues of what's really going on with the economy.
If you dig deeper into the earnings report card, though, the surprises get more, well, surprising - but not necessarily for the better. Check out some of the less-touted surprises that are just as telling about the state of corporate
IN PICTURES: Learn To Invest In 10 Steps
More Than Just A Modest Turnaround
The swing back to a profit was impressive enough. The fact that chipmaker Novellus Systems (Nasdaq: NVLS) topped analysts' per-share earnings expectations of 60 cents by posting a profit of 66 cents per share is just icing on the cake. That's not even the most amazing part of all, though.
Revenue soared by 170% for Novellus last quarter. CEO Richard Hill also mentioned that he expected to see more growth going forward. And while the triple-digit growth rate may not be repeatable, current demand levels - fueled by upgrades in communication infrastructure, public sector IT investments and
Four In A Row
It seems as if the regional banks are looking more and more attractive every day. Bank of the Ozarks (Nasdaq: OZRK) layered on another pro-regional argument with last quarter's 14.6% increase in net earnings. The operating EPS of 76 cents was a mere 35% higher than the estimated 56 cents.
Money Well Spent
Good luck figuring out Audiovox's (Nasdaq: VOXX) income statement for last quarter. Operating expenses were up, but largely due to acquisitions and employee stock option expenses. On the flip side, those expenses were more than offset by some savvy foreign currency exchange hedges and a tax benefit.
Either way, the electronics maker cranked up Q2 revenue by 8.8% and improved EPS from 2 to 5 cents - even if it was all acquisition-based. Better still (and impressive), the cash position has improved despite the acquisitions.
In other words, Audiovox is getting a serious ROI on what was viewed as a risky strategy a few months ago.
Connected Dots
Double dip recession? (Learn more, see Recession: What Does It Mean To Investors?) You never really know, but considering two of the three earnings surprises discussed above were from more "discretionary and cyclical" companies, and light on the "non-cyclical" scale, it's hard to argue that consumers are pinching pennies. The CSX and Alcoa news is just more evidence of the same idea.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
James Brumley
James Brumley is a freelance writer and registered investment advisor. He began his career as a broker with a major Wall Street firm, where fundamentals and long-term holding periods were core strategies. After that, he switched gears completely, becoming an analyst at a short-term trading newsletter that focused on technical analysis. He now manages client money using the best of both philosophies. His company, Bluegrass Portfolio Management, offers investors an opportunity to reap superior returns with minimized risk.
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