As earnings season comes to a close, we decided to look back on the companies who posted earnings per share above the expected number. We then compared them to all firms in the S&P 500 with a history of beating expectations for four consecutive quarters. The idea being, if these firms have now reported 5 consecutive quarters of surprises, are investors continually undervaluing them?
In our list below we refer to company’s earning surprises. The concept of an earnings surprise is pretty straight-forward – the quarterly earnings come out, and earnings analysts are “surprised” by how they don’t match up to their predictions. “Surprise” doesn’t necessarily have to mean shocking either, it can be the difference of a few cents between what earning analysts predicted and what the company actually reports. To be clear, earnings typically refer to after-tax net income. For this list we only use positive surprises.
Business Section: Investing Ideas
The companies listed below all have histories of outperforming expectations for 5 consecutive quarters, including the most current earnings season. Do you think they are still trading at undervalued prices, and will continue this bullish trend in the quarters to come?
Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for the stocks mentioned below:
1. Alexion Pharmaceuticals, Inc. (ALXN, Earnings, Analysts, Financials): Engages in the discovery, development, and commercialization of biologic therapeutic products in the United States, Europe, Latin America, Japan, and the Asia Pacific. Market cap at $18.91B, most recent closing price at $98.44. In Jun 2011: Reported EPS at 0.29 vs. estimate at 0.27 (surprise of 7.4%). In Sep 2011: Reported EPS at 0.37 vs. estimate at 0.29 (surprise of 27.6%). In Dec 2011: Reported EPS at 0.41 vs. estimate at 0.34 (surprise of 20.6%). In Mar 2012: Reported 0.45 vs. estimate at 0.39 (surprise of 15.4%. [Average earnings surprise at 17.75%]. Most recent earnings report beat expectations by 27%.
2. Boeing Co. (BA, Earnings, Analysts, Financials): Engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. Market cap at $54.61B, most recent closing price at $72.91. In Jun 2011: Reported EPS at 1.25 vs. estimate at 0.97 (surprise of 28.9%). In Sep 2011: Reported EPS at 1.46 vs. estimate at 1.1 (surprise of 32.7%). In Dec 2011: Reported EPS at 1.83 vs. estimate at 1.01 (surprise of 81.2%). In Mar 2012: Reported 1.22 vs. estimate at 0.94 (surprise of 29.8%. [Average earnings surprise at 43.15%]. Most recent earnings report beat expectations by 14.4%.
3. Freeport-McMoRan Copper & Gold Inc. (FCX, Earnings, Analysts, Financials): Engages in the exploration, mining, and production of mineral resources. Market cap at $30.96B, most recent closing price at $32.62. In Jun 2011: Reported EPS at 1.49 vs. estimate at 1.33 (surprise of 12%). In Sep 2011: Reported EPS at 1.1 vs. estimate at 1.02 (surprise of 7.8%). In Dec 2011: Reported EPS at 0.67 vs. estimate at 0.6 (surprise of 11.7%). In Mar 2012: Reported 0.96 vs. estimate at 0.86 (surprise of 11.6%. [Average earnings surprise at 10.78%]. Most recent earnings report beat expectations by 1.4%.
4. The Coca-Cola Company (KO, Earnings, Analysts, Financials): Distributes, and markets nonalcoholic beverages worldwide. Market cap at $173.44B, most recent closing price at $76.88. In Sep 2011: Reported EPS at 1.03 vs. estimate at 1.02 (surprise of 1%). In Dec 2011: Reported EPS at 0.79 vs. estimate at 0.77 (surprise of 2.6%). In Mar 2012: Reported EPS at 0.89 vs. estimate at 0.87 (surprise of 2.3%). In Jun 2012: Reported 1.22 vs. estimate at 1.19 (surprise of 2.5%. [Average earnings surprise at 2.1%]. Most recent earnings report beat expectations by 2.5%.
5. Lockheed Martin Corporation (LMT, Earnings, Analysts, Financials): Engages in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products in the areas of defense, space, intelligence, homeland security, and government information technology in the United States and internationally. Market cap at $28.22B, most recent closing price at $86.91. In Jun 2011: Reported EPS at 2.14 vs. estimate at 1.93 (surprise of 10.9%). In Sep 2011: Reported EPS at 1.99 vs. estimate at 1.81 (surprise of 9.9%). In Dec 2011: Reported EPS at 2.14 vs. estimate at 1.94 (surprise of 10.3%). In Mar 2012: Reported 2.02 vs. estimate at 1.7 (surprise of 18.8%. [Average earnings surprise at 12.48%]. Most recent earnings report beat expectations by 13.08%.
6. Motorola Solutions, Inc. (MSI, Earnings, Analysts, Financials): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap at $13.4B, most recent closing price at $45.89. In Jun 2011: Reported EPS at 0.54 vs. estimate at 0.51 (surprise of 5.9%). In Sep 2011: Reported EPS at 0.66 vs. estimate at 0.59 (surprise of 11.9%). In Dec 2011: Reported EPS at 0.87 vs. estimate at 0.82 (surprise of 6.1%). In Mar 2012: Reported 0.59 vs. estimate at 0.54 (surprise of 9.3%. [Average earnings surprise at 8.3%]. Most recent earnings report beat expectations by 10.6%.
7. Northrop Grumman Corporation (NOC, Earnings, Analysts, Financials): Provides products, services, and solutions in aerospace, electronics, information systems, shipbuilding, and technical service sectors. Market cap at $16.04B, most recent closing price at $63.76. In Jun 2011: Reported EPS at 1.81 vs. estimate at 1.68 (surprise of 7.7%). In Sep 2011: Reported EPS at 1.86 vs. estimate at 1.68 (surprise of 10.7%). In Dec 2011: Reported EPS at 2.09 vs. estimate at 1.67 (surprise of 25.1%). In Mar 2012: Reported 1.96 vs. estimate at 1.59 (surprise of 23.3%. [Average earnings surprise at 16.7%]. Most recent earnings report beat expectations by 10.6%.
8. Philip Morris International, Inc. (PM, Earnings, Analysts, Financials): Engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Market cap at $150.07B, most recent closing price at $87.99. In Jun 2011: Reported EPS at 1.34 vs. estimate at 1.22 (surprise of 9.8%). In Sep 2011: Reported EPS at 1.37 vs. estimate at 1.24 (surprise of 10.5%). In Dec 2011: Reported EPS at 1.1 vs. estimate at 1.09 (surprise of 0.9%). In Mar 2012: Reported 1.25 vs. estimate at 1.19 (surprise of 5%. [Average earnings surprise at 6.55%]. Most recent earnings report beat expectations by 1.5%.
9. Regions Financial Corp. (RF, Earnings, Analysts, Financials): Operates as the holding company for the Regions Bank that provides a range of commercial, retail, and mortgage banking services in the United States. Market cap at $9.03B, most recent closing price at $6.39. In Jun 2011: Reported EPS at 0.04 vs. estimate at -0.01 (surprise of 500%). In Sep 2011: Reported EPS at 0.08 vs. estimate at 0.04 (surprise of 100%). In Dec 2011: Reported EPS at 0.09 vs. estimate at 0.06 (surprise of 50%). In Mar 2012: Reported 0.14 vs. estimate at 0.08 (surprise of 75%. [Average earnings surprise at 181.25%]. Most recent earnings report beat expectations by 42.8%.
10. Snap-on Inc. (SNA, Earnings, Analysts, Financials): Snap-on Incorporated manufactures and markets tools, diagnostics, equipment, software, and service solutions for professional users in the United States, the United Kingdom, Canada, Germany, Japan, France, Australia, Spain, the Netherlands, Italy, China, and Sweden. Market cap at $3.9B, most recent closing price at $67.20. In Jun 2011: Reported EPS at 1.14 vs. estimate at 1.08 (surprise of 5.6%). In Sep 2011: Reported EPS at 1.16 vs. estimate at 1.03 (surprise of 12.6%). In Dec 2011: Reported EPS at 1.27 vs. estimate at 1.17 (surprise of 8.5%). In Mar 2012: Reported 1.21 vs. estimate at 1.16 (surprise of 4.3%. [Average earnings surprise at 7.75%]. Most recent earnings report beat expectations by 8.3%.
11. E. I. du Pont de Nemours and Company (DD, Earnings, Analysts, Financials): Market cap at $45.64B, most recent closing price at $48.71. In Jun 2011: Reported EPS at 1.37 vs. estimate at 1.34 (surprise of 2.2%). In Sep 2011: Reported EPS at 0.69 vs. estimate at 0.56 (surprise of 23.2%). In Dec 2011: Reported EPS at 0.35 vs. estimate at 0.33 (surprise of 6.1%). In Mar 2012: Reported 1.61 vs. estimate at 1.55 (surprise of 3.9%. [Average earnings surprise at 8.85%]. Most recent earnings report beat expectations by 1.4%
12. SunTrust Banks, Inc. (STI, Earnings, Analysts, Financials): Operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. Market cap at $12.35B, most recent closing price at $22.94. In Jun 2011: Reported EPS at 0.33 vs. estimate at 0.31 (surprise of 6.5%). In Sep 2011: Reported EPS at 0.39 vs. estimate at 0.35 (surprise of 11.4%). In Dec 2011: Reported EPS at 0.28 vs. estimate at 0.27 (surprise of 3.7%). In Mar 2012: Reported 0.46 vs. estimate at 0.33 (surprise of 39.4%. [Average earnings surprise at 15.25%]. Most recent earnings report beat expectations by 13.6%.
13. Textron Inc. (TXT, Earnings, Analysts, Financials): Operates in the aircraft, defense, automobile, industrial, and finance businesses worldwide. Market cap at $7.26B, most recent closing price at $25.89. In Jun 2011: Reported EPS at 0.29 vs. estimate at 0.24 (surprise of 20.8%). In Sep 2011: Reported EPS at 0.45 vs. estimate at 0.31 (surprise of 45.2%). In Dec 2011: Reported EPS at 0.49 vs. estimate at 0.34 (surprise of 44.1%). In Mar 2012: Reported 0.41 vs. estimate at 0.35 (surprise of 17.1%. [Average earnings surprise at 31.8%]. Most recent earnings report beat expectations by 31.8%.
14. V.F. Corporation (VFC, Earnings, Analysts, Financials): Designs and manufactures, or sources from independent contractors various apparel and footwear products primarily in the United States and Europe. Market cap at $16.45B, most recent closing price at $150.12. In Jun 2011: Reported EPS at 1.17 vs. estimate at 1.02 (surprise of 14.7%). In Sep 2011: Reported EPS at 2.87 vs. estimate at 2.58 (surprise of 11.2%). In Dec 2011: Reported EPS at 2.32 vs. estimate at 2.31 (surprise of 0.4%). In Mar 2012: Reported 1.94 vs. estimate at 1.87 (surprise of 3.7%. [Average earnings surprise at 7.5%]. Most recent earnings report beat expectations by 18.1%.
15. Wyndham Worldwide Corporation (WYN, Earnings, Analysts, Financials): Provides various hospitality products and services to individual consumers and business customers in the United States and internationally. Market cap at $7.2B, most recent closing price at $49.34. In Jun 2011: Reported EPS at 0.64 vs. estimate at 0.56 (surprise of 14.3%). In Sep 2011: Reported EPS at 0.94 vs. estimate at 0.88 (surprise of 6.8%). In Dec 2011: Reported EPS at 0.47 vs. estimate at 0.44 (surprise of 6.8%). In Mar 2012: Reported 0.6 vs. estimate at 0.55 (surprise of 9.1%. [Average earnings surprise at 9.25%]. Most recent earnings report beat expectations by 2.6%.
(Written by Ryan Horch)
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Analyze These Ideas: Getting Started
Dig Deeper: Access Company Snapshots, Charts, Filings
- Alexion Pharmaceuticals, Inc. (ALXN, Chart, Download SEC Filings)
- Boeing Co. (BA, Chart, Download SEC Filings)
- Freeport-McMoRan Copper & Gold Inc. (FCX, Chart, Download SEC Filings)
- The Coca-Cola Company (KO, Chart, Download SEC Filings)
- Lockheed Martin Corporation (LMT, Chart, Download SEC Filings)
- Motorola Solutions, Inc. (MSI, Chart, Download SEC Filings)
- Northrop Grumman Corporation (NOC, Chart, Download SEC Filings)
- Philip Morris International, Inc. (PM, Chart, Download SEC Filings)
- Regions Financial Corp. (RF, Chart, Download SEC Filings)
- Snap-on Inc. (SNA, Chart, Download SEC Filings)
- E. I. du Pont de Nemours and Company (DD, Chart, Download SEC Filings)
- SunTrust Banks, Inc. (STI, Chart, Download SEC Filings)
- Textron Inc. (TXT, Chart, Download SEC Filings)
- V.F. Corporation (VFC, Chart, Download SEC Filings)
- Wyndham Worldwide Corporation (WYN, Chart, Download SEC Filings)
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