We'll start with GAMCO Investors (NYSE:GBL). The company became the latest mutual-fund specialist to beat the Street when its quarterly profits rose from $0.43 a share last year to $0.58 a share this time around (excluding a reserve against earnings). Analysts figured that the company managed by investing celebrity Mario Gabelli would only be good for $0.51 a share. This follows market-thumping news a week earlier out of peers T. Rowe Price (NASDAQ:TROW) and Franklin Resources (NYSE:BEN).
Can you leave those who watch income statements seeing red, and still hit it out of the park? Warner Music Group (NYSE:WMG) did. The music label behind popular artists like Green Day and Sean Paul lost $0.10 a share during its fiscal third quarter, but it was far less than the $0.19-per-share loss that analysts donning earmuffs were expecting. A year earlier, Warner lost $0.34 before a series of charges.
Warner's turnaround story has been an impressive one. Is the CD dead? Not yet, but Warner has been a major player in the margin-rich potential of digitally delivered tunes. That segment now accounts for 11% of revenues at Warner. Now that the dueling buyout offers between Warner and EMI have come to an end, investors can begin to size up Warner as a legitimate leader in the new musical revolution. Warner doesn't excite you? Did you know that the company has beaten Wall Street bottom-line targets in all five quarters as a public company? That's not too shabby for a sector that way too many investors have all but abandoned.
iRobot (NASDAQ:IRBT) was another topper. The company behind vacuum-cleaning and floor-scrubbing robots on the consumer-electronics side and bomb detectors on the military front lost $0.08 a share during its seasonally sleepy second quarter. Like Warner, this was the good kind of red ink, because it was an improvement over the $0.30 a share it lost last year and the $0.20 that it was forecasted to lose this quarter. The Rule Breakers recommendation also provided a healthy outlook for the rest of the year.
So keep watching the companies that lap expectations. Over time, it will be a rewarding experience for investors. 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.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
