Why settle for ordinary quarterly reports?
Every week, I look at three companies that have beaten market expectations. Leaving Wall Street's pros with quizzical looks usually means that the companies have more in the tank than the analysts figured, and capital appreciation often follows.
So let's examine a few companies that humbled the prognosticators over the past few trading days.
We can start with Steelcase (Nasdaq: SCS). The office-furniture manufacturer posted a quarterly profit of $0.28 a share before restructuring charges, comfortably ahead of the $0.26 a share it earned a year ago and the $0.22 a share that Mr. Market was expecting.
That's right: A company that sells new corporate furnishings beat the market. Sure, Steelcase also hosed down its current quarter's outlook, but I always like to see how office-furniture companies such as Steelcase and Herman Miller (Nasdaq: MLHR) are faring, since their health seems to be a good indicator of corporate spending.
Marriott (NYSE: MAR) is another topper. The hotel giant came through with an adjusted profit of $0.34 a share from continuing operations. Analysts were checking in at the $0.32 mark.
The news wasn't all good, though. Marriott's timeshare business tanked. More importantly, the company sees worldwide revenue per available room dipping during the fiscal year's final quarter.
Finally, we have Circuit City (NYSE: CC) making a surprising appearance in this weekly list of accolades. Yes, the consumer-electronics chain is hurting. It's clearly no Best Buy (NYSE: BBY). Heck, even smaller chains, such as Conn's (Nasdaq: CONN) and Hastings (Nasdaq: HAST), are at least profitable. However, losing just $1.00 a share on a non-GAAP basis is a smaller deficit than what bearish pros were banking on. On a slow earnings-front week, it'll have to do.
So keep watching the companies that exceed 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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