Every week, I take a look at a few companies that lapped their profit targets. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means the companies have more in the tank than analysts figured, and capital appreciation often follows.
Let's take a look at a few companies that humbled the prognosticators this past week.
We can start with Oracle (Nasdaq: ORCL). CEO Larry Ellison may have made big headlines last week after the successful IPO of his NetSuite (NYSE: N) upstart, but his enterprise software giant was the star on the earnings stage. Oracle earned $0.31 a share in its latest quarter, well ahead of the $0.22 per share it earned a year ago and the $0.27 a share the pros were looking for this time around.
Carnival (NYSE: CCL) also cruised past the pros. The world's largest cruise ship operator earned $0.44 a share in its latest quarter, despite a 37% surge in fuel costs. Wall Street was looking for a profit of $0.43 a share, and will gladly take the extra $0.01 per share.
With 2008 bookings coming in ahead of last year's pace -- and cruisers not flinching at higher prices to offset the spike in fuel -- Carnival's report bodes well for rivals like Royal Caribbean (NYSE: RCL), as well as Steiner Leisure (Nasdaq: STNR), which runs the spas on Carnival's largest ships.
Finally, we have Adobe Systems (Nasdaq: ADBE) publishing another compelling quarterly report. The publishing-software juggernaut earned $0.49 a share in its latest period. Like Carnival, Adobe topped the market's target by just $0.01 a share, but there's more to that than meets the eye.
Adobe has actually beaten Wall Street's estimates in all but one quarter over the past six years. That's an impressive run for a company that has come to define the opportunities in Web-based publishing.
So, keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors, as the market rewards the overachievers. That's the kind of surprise we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.
Either way, come back next Monday to learn about more stocks that blew the market away.
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