Why settle for ordinary quarterly reports?

Each week I take a look at three companies that beat market expectations, since I believe that that'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, and capital appreciation often follows.

Let's take a look at a few companies that humbled the prognosticators over the past few trading days.

We can start with Johnson & Johnson (NYSE:JNJ). There were "no more tears" when the drug and consumer nondurables titan posted a quarterly profit of $1.26 a share. That was flat with last year's $1.26-a-share showing, but comfortably ahead of the $1.22 a share that analysts had been expecting.

It wasn't perfect. Cost-conscious consumers shifting to cheaper generics and a strengthening dollar nicked the top line. However, J&J's landing bodes well for fellow drug giants like Merck (NYSE:MRK), Genzyme (NASDAQ:GENZ), and Schering-Plough (NYSE:SGP) that report this week.

Google (NASDAQ:GOOG) is another topper. The search engine leader earned $5.16 a share in its latest quarter, blasting past both the $4.93 a share that Wall Street was banking on and the $4.84 a share that Big G rang up a year ago.

Finally, we have Goldman Sachs (NYSE:GS) on the run. The investment banker clocked in with profits of $3.39 a share. Analysts figured that the firm would only be good for $1.64 a share.

Goldman Sachs is also making headway toward paying back its TARP capital, no doubt as a way to battle back against the public's unrest over the firm's taking $10 billion in TARP funds and clearing nearly $13 billion of the money that went to AIG (NYSE:AIG) as a counterparty to AIG's losing bets.

So, keep watching the companies that lap 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 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.