Why settle for ordinary quarterly reports?
Each week, I spotlight three companies that beat market expectations. I believe that outperformance is the biggest factor in a stock's likelihood of 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'll start with Amazon.com (NASDAQ:AMZN). The country's leading e-tailer posted a quarterly profit of $0.41 a share on Thursday. Analysts were expecting earnings to clock in at only $0.31 a share, a decline over the $0.34 a share Amazon put up a year ago. Malls may still be problematic ghost towns, but the online retailing climate looks surprisingly rosy.
Apple (NASDAQ:AAPL) is another topper. Earnings climbed 15% to $1.33 a share. Just like Amazon, Wall Street's finest had the company pegged to report a lower profit year over year.
Mac sales may have struggled, but the company more than made up for it with booming iPhone sales. Investors should have seen this coming. Between the blowout quarter posted by BlackBerry maker Research In Motion (NASDAQ:RIMM) earlier this month and Apple's knack for consistently trouncing estimates, Apple was an easy winner to predict.
Finally, RadioShack (NYSE:RSH) delivered a welcome reception. The small-box retailer rang up net income of $0.34 a share during its first quarter. Once again, analysts figured those earnings would fall short compared to last year.
Instead of the year-ago $0.30-a-share profit, or the mere $0.22 a share the pros were settling for, RadioShack gained ground on the bottom line. Folks are making a big deal about how Best Buy (NYSE:BBY) will be a major beneficiary of the liquidation of its superstore rival Circuit City last month, but don't ignore the smaller concepts like RadioShack, either.
Keep watching the companies that surpass expectations. Over time, that vigilance will pay off 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.
Apple, Amazon.com, and Best Buy are Motley Fool Stock Advisor selections. The Fool owns shares of Best Buy, which is also a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.
Longtime Fool contributor Rick Munarriz is a fan of toppers. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
