Don't 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 stunned expressions 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 pros over the past few trading days.
We can start with SAIC (NYSE:SAI). The government services contractor cranked out a profit of $0.54 a share from continuing operations, besting the $0.52 a share that analysts were forecasting. SAIC had come up short on the bottom line in its previous quarterly outings, so the positive report was a welcome surprise.
SAIC's guidance for the year ahead wasn't as kind, but it did sweeten the pot by declaring a special one-time dividend of $1 a share. SAIC is in the process of separating its government information technology services unit from its work assisting national security.
We also have BlackBerry (NYSE:BB) stunning the market with an actual quarterly profit.
Analysts were betting on more red ink after the smartphone pioneer served up three consecutive quarterly losses. However, BlackBerry came through with adjusted net income of $0.22 a share from continuing operations.
It wasn't a perfect report. BlackBerry closed out the period with 3 million fewer subscribers than it had when the quarter began. Revenue tumbled 36%, and you have to go back a couple of years to find the last time that BlackBerry only shipped out 6 million devices.
But it was still a solid beat on the bottom line, and that's what counts here.
Finally, we have GameStop (NYSE:GME) defying gravity. Despite a decline in same-store sales, profitability climbed to $2.16 a share. Wall Street was only perched at $2.09 a share. The video game industry is still in flux, and the specialty retailer's outlook is far from encouraging. However, the stock still hit a 52-week high on Thursday after delivering the well-received report.
Moving in the right direction
It's important to keep watching the companies that surpass expectations. Over time, it will be a lucrative experience for investors as the market rewards the overachievers. That's the kind of surprise that we look for in the Rule Breakers newsletter service. Want in? Check out a 30-day trial subscription.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of GameStop. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.