Every week, I look at a few companies that beat their profit targets. Leaving Wall Street's pros with quizzical looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured, and capital appreciation often follows.
Let's peruse some of the companies that humbled prognosticators this past week.
We can start with Costco (Nasdaq: COST). The warehouse club earned $0.85 a share in its latest quarter. That's lower than the $0.90 a share it reported a year ago, but well ahead of the $0.77 a share that analysts expected. The news bodes well for warehouse club rivals BJ's Wholesale (NYSE: BJ) and Sam's Club parent Wal-Mart (NYSE: WMT) when they report next month.
PepsiCo (NYSE: PEP) also popped higher. The soft-drink and salty-snacks giant rang up a profit of $1.08 a share, besting both the $1.06 a share it earned a year earlier, and the $1.03 a share for which Wall Street was braced. The news comes during the same week in which its largest bottler -- Pepsi Bottling Group (NYSE: PBG) -- also landed just ahead of Mr. Market's guesstimates.
Finally, we have Yum! Brands (NYSE: YUM) bringing home the bacon. The company behind KFC, Taco Bell, and Pizza Hut delivered net income of $0.69 a share during its latest quarter. The pros had suggested that earnings would equal the $0.58 a share it earned last year.
Admittedly, currency translations helped stuff the crust of Yum! Brands' latest earnings. Pizza Hut, for example, suffered a 13% dip in domestic comps. We can compare that to rival Domino's Pizza (NYSE: DPZ) when it reports tomorrow. Even so, we can still applaud Yum!'s cost-cutting initiatives and recessionary resiliency.
Keep watching the companies that top expectations. Over time, it will be a profitable experience for investors, as the market rewards the overachievers. That's the kind of surprise we look for in the Motley Fool 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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