3 Earnings Reports That Caught My Attention Last Week

The first half of 2012 is now in the books, and now that we're about three-quarters of the way through the third quarter, I can't help but point out that the majority of reports up until now have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.

Each week this year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Source: Yahoo! Finance.

Genesco
Raise your hand if the retail shoe and accessories sector has you completely baffled right now! Don't be shy -- I've got my hand up.

This is about as confusing as a time as I can recall for brand-name merchandisers and retailers. Brown Shoe (NYSE: BWS), which operates the Famous Footwear and Naturalizer shoe chains, crushed Wall Street's estimates by better than 400%, but it did so on the heels of a revenue decline and store closures. Also, purse and accessory designers Coach and Vera Bradley have failed to impress investors in recent months. Yet Genesco has joined an elite group in bucking the trend of weaker consumer spending.

In Genesco's recently ended second quarter, the company noted a 127% improvement in net income that trounced the Street's forecasts. Sales growth was driven by the acquisition of the Schuh Group, with comparable-store sales rising 4% among all of its stores. The real boost, though, is hidden deep in its tight cost controls. Expenses for the quarter dove 9.2% and operating margin rose 270 basis points. I'm not sold on Genesco's outperformance with so many of its peers struggling, but if it can keep its inventory and costs under control, the downside would appear to be limited.

Mobile TeleSystems
Did someone order up a plate of political risk and a side of "What the heck just happened?" That's the serving shareholders of Mobile TeleSystems were dealt this quarter.

Mobile TeleSystems, one of Russia's largest mobile phone operators, was forced to write off $1.1 billion in the second quarter due to having its license to operate in Uzbekistan permanently suspended in mid-August. Clearly, that's not great news for MTS shareholders, but it's also nowhere near the death knell you'd think.

In spite of Russia having one of the highest concentrations of cell phone subscriptions per user, the usage of 3G and other forms of wireless connectivity is still relatively low, leaving plenty of room for growth in the average revenue per user column. More importantly, MTS' operating income before depreciation and amortization rose 5.4% to 44% this quarter, well ahead of its own previous guidance. OIBDA is the single most important statistic worth watching for MTS and is, at least to me, a signal that the company's core business is very healthy.

Political risks like what shareholders witnessed this quarter will always exist, but the future of mobile in Russia continues to look bright.

Ciena
Well, isn't this magical? After CEO Gary Smith noted for months that the second half of 2012 would produce much better results than the first half, Ciena's guidance fell well short of Wall Street's expectations. Am I surprised? Not really.

Since 2009, Ciena's sales have basically tripled, yet it's still losing money. It's been years since Ciena has been able to put together a positive string of earnings growth and actually meet its own forecasts. Cisco Systems (Nasdaq: CSCO) is facing many of the same headwinds in Europe and in the Americas that Ciena is facing, but that didn't stop it from reporting 4% sales growth and boosting its dividend by 75% earlier this month. JDS Uniphase saw its sales slide but still managed to remain upbeat.

Why Ciena can't seem to get its act together after all these years is beyond my comprehension. Ciena's biggest customers, AT&T and Sprint Nextel, appear to be outlining their spending patterns in plain sight, but Ciena simply can't gain any traction or order visibility. Although my CAPS limit order of outperform recently kicked in on Ciena, I can't say I'm thrilled with its near-term prospects or its poor history of meeting its own forecasts.

Foolish roundup
Sometimes an earnings beat or miss isn't as cut-and-dried as it appears. I've given my two cents on what's next for each of these companies -- now it's your turn to sound off. Share your thoughts in the comments section below, and consider adding these stocks to your free and personalized Watchlist.

• Add Genesco to My Watchlist.
• Add Mobile TeleSystems to My Watchlist.
• Add Ciena to My Watchlist.

If you'd like the inside track on three more companies that could wind up in the earnings beat column, then I suggest you get a copy of our special report: "3 American Companies Set to Dominate the World." Did I mention the best part? This report is completely free, so don't miss out!