Underpromise. Overdeliver. That's the mantra that drives earnings surprises. For investors, the treat is especially sweet because it means that professional bean-counting analysts have underestimated a company's profit power. That often leads to more upside surprises in the future.
That said, let's take a closer look at a few of the companies that humbled the prognosticators this past week.
We'll start with Adobe Systems
The company expects to earn between $0.27 and $0.29 per share in the final quarter of its fiscal year. That translates into a strong company trading between 25 and 26 times fiscal 2005's bottom line. No, that isn't cheap. However, compared with other online titans, like Google
So keep watching for the companies that lap expectations. Over time, it will be a rewarding experience for investors. That's the kind of surprise that market watchers relish in the Rule Breakers newsletter service. The strategy has paid off, considering that the average Rule Breakers selection has more than tripled the S&P 500's market return. 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.
Longtime Fool contributor Rick Munarriz is a fan of toppers, but he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.