Why settle for ordinary quarterly reports?
Every week I take a look at three companies that beat market expectations, since I believe that it's the biggest factor in a stock beating the market. Leaving Wall Street's pros with puzzled looks on their faces can be a good thing. It usually means that the companies have more in the tank than analysts figured. Capital appreciation typically follows.
Let's take a look at a few companies that humbled the prognosticators over the past few trading days.
We can start with GT Solar (Nasdaq: SOLR ) . The maker of equipment for photovoltaic manufacturers earned $0.25 a share in its fiscal third quarter, a sunny-side up surprise for analysts braced for a $0.15-a-share showing.
GT has been a wild stock since going public two years ago. The stock tanked 83% between its July 2008 IPO and the end of the year before bouncing back to nearly double in 2009. GT's solid showing bodes well for JA Solar (Nasdaq: JASO ) and Evergreen Solar (Nasdaq: ESLR ) , which are reporting earnings this week.
Pitney Bowes (NYSE: PBI ) also earned the market's stamp of approval. The metered-mail specialist posted adjusted net income of $0.64 a share, well short of the $0.77 a share it earned a year ago, but the pros were banking on a profit of only $0.61 a share. The company's bottom line may have taken a step back in 2009, but Pitney Bowes still managed to bump its dividend higher for the 28th year in a row.
Finally, we have Akamai (Nasdaq: AKAM ) delivering good news. The country's top content-delivery network -- speeding up the serving of secure files and Web pages -- earned $0.46 a share in its latest quarter. Wall Street was settling for $0.43 a share on the bottom line.
Despite the pricing pressures of a competitive cyberspace niche where smaller rivals Limelight Networks (Nasdaq: LLNW ) and InterNAP Network Services (Nasdaq: INAP ) fight to price their services competitively, Akamai found a way to grow.
It's important to keep watching the companies that surpass 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 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.