The Knot's It

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With all of the jilted brides and grooms out there, it's good to know that we can count on The Knot (Nasdaq: KNOT) to say "I do" at the appropriate time. The wedding planning site produced numbers worthy of some rice-tossing in its third-quarter report this morning.

Earnings nearly quadrupled on a per-share basis -- from $0.03 to $0.11 -- as revenue rose 41% higher to hit $18.5 million. Wall Street was expecting the company to earn just $0.10 a share on $17.8 million in revenue.

I wouldn't overemphasize the top-line surprise. $1.5 million of that improvement came from the early-September closing of its deal to acquire WeddingChannel.com, and I'm not naive enough to assume that all of the analysts had the timing of the merger down perfectly in concocting their forecast models.

However, we can certainly give The Knot a round of applause for hitting it out of the park on the bottom line. This could have been a challenge, as the company had to overcome the extra shares created after its cash and stock purchase of WeddingChannel.com, as well as a rather excessive secondary offering in August.

I'm a sucker for favorable trends, though. On the Motley Fool Rule Breakers newsletter discussion board, I was asked last week about the chances of The Knot being a disappointment, and I just didn't see it in the cards.

"Always a fan of innocent until proven guilty or -- in this case, market beater until proven laggard -- here are how the last few quarters have played out," I wrote at the time.

	EPS	EPS Est.	Year-Ago EPS
Q2 2006	$0.15	$0.12	$0.05
Q1 2006	$0.07	$0.05	$0.02
Q4 2005	$0.06	$0.04	$0.01

Today's beating of the market may seem tame by more recent standards -- and this quarter may prove challenging, as fully diluted shares will increase now that the secondary and acquisition shares will no longer be weighted -- but The Knot is clearly doing things right.

Generating online leads in a lucrative niche sounds like an easy business, but try telling that to InsWeb (Nasdaq: INSW) in insurance or Autobytel (Nasdaq: ABTL) in auto retailing.

Companies like The Knot and Bankrate (Nasdaq: RATE), which have made the cut as actual Rule Breakers by dominating their Web-based domains, are rare. However, finding the right growth stocks can also be rewarding, as The Knot has doubled since being singled out in the growth-stock newsletter earlier this year.

Later this week, the December issue of Motley Fool Rule Breakers will go out to all active and trial subscribers with two brand-new picks. And as couples turning to TheKnot.com to plan that perfect day can probably attest, there is nothing wrong with pairing something new with something old, something borrowed, and something blue.

Thankfully, investors in The Knot aren't feeling too blue at the moment.

The Knot and Bankrate have been recommended to Motley Fool Rule Breakers subscribers. You can see what all the fuss is about with a free 30-day trial subscription.

Longtime Fool contributor Rick Munarriz regrets that The Knot wasn't around when he got married. He could have had a punctual person working the video camera that day. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.