10 Earnings-Season Surprises for Analysts

JPMorgan, Citigroup and eight other companies exceeded analysts' expectations by the widest margins last quarter.
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BOSTON (TheStreet) -- Earnings season is under way and stocks are rallying on better-than-expected profits. Here are 10 companies that beat analysts' earnings expectations by wide margins. They are ordered by outperformance, from smallest to biggest surprise.

10.

JPMorgan Chase

(JPM) - Get Report

is a global financial-services company. Second-quarter net income increased 76% to $4.8 billion and earnings per share nearly quadrupled to $1.09, beating analysts' consensus estimate by 54%. JPMorgan shares have gained just 1% since the announcement. They are still cheap, selling for a forward earnings multiple of 8.5, a 39% discount to the industry average. Of analysts covering the stock, 29, or 88%, rate it "buy" and four rank it "hold." None rate it "sell." A median target of $53.45 implies a 31% return in the weeks ahead.

9.

Ford

(F) - Get Report

is a U.S. automobile maker. Second-quarter net income gained 15% to $2.6 billion, but earnings per share dropped 12% to 61 cents, hurt by dilution. Still, the earnings-per-share tally exceeded researchers' expectations by 67%. Ford's stock has rallied 12% since the release. It sells for a price-to-projected-earnings ratio of 7.4, an attractive 83% discount to the auto industry average. Of analysts following Ford, nine, or 56%, advise buying its shares, six recommend holding and one says to sell.

8.

SunTrust Banks

(STI) - Get Report

is an Atlanta-based regional bank. SunTrust swung to a second-quarter profit of $12 million, but a per-share loss of 11 cents, less than the 35-cent loss predicted by sell-side firms. SunTrust shares have gained 18% since the announcement. Still, they have decreased 5% during the past three months. SunTrust trades at a price-to-book ratio of 0.6 and a price-to-sales ratio of 1.4 -- 54% and 16% discounts to peer averages. Of firms evaluating SunTrust, 10, or 19%, rate its stock "buy," while 19 rate it "hold" and eight rank it "sell."

7.

Comerica

(CMA) - Get Report

is a diversified bank operating in Michigan, California, Texas and Florida. Second-quarter profit nearly quadrupled to $70 million, or 39 cents a share, beating the consensus estimate by 70%. Revenue declined 22%, but the operating margin extended to 32% from 14%. Comerica shares sell for a forward earnings multiple of 17, a modest discount to the financial services industry average. Of analysts covering the stock, 11, or 38%, rank it "buy," 14 rate it "hold" and four rate it "sell." A median target of $43.14 suggests 9% of upside remains.

6.

Advanced Micro Devices

(AMD) - Get Report

makes semiconductors for computing and graphics markets. The company's second-quarter loss narrowed to $43 million, or 6 cents a share, from a loss of $310 million, or 49 cents, a year earlier. The earnings-per-share tally exceeded expectations by 75%. Advanced Micro's shares have rallied 9% since the announcement. They trade at a forward earnings multiple of 11 and a cash flow multiple of 5.8 -- 20% and 67% discounts to industry averages. Roughly 28% of analysts covering Advanced Micro Devices rate its stock "buy."

5.

Citigroup

(C) - Get Report

is a diversified financial-services company. Second-quarter net income fell 37% to $2.7 billion and earnings per share tumbled 82% to 9 cents, still exceeding analysts' consensus estimate by a margin of 84%. Quarterly revenue grew 11% and the operating margin climbed into positive territory. Citigroup shares have gained 1% since the quarterly report. They sell for a price-to-projected-earnings ratio of 9.2 and a price-to-book ratio of 0.8 -- 34% and 11% discounts to peer averages. Of researchers covering the stock, 13, or 52%, rate it "buy."

4.

Boston Scientific

(BSX) - Get Report

makes medical equipment, including cardiovascular and endosurgery devices. Second-quarter profit decreased 38% to $98 million, or 6 cents a share, surpassing analysts' consensus estimate by 87%. The operating margin narrowed to 13% from 17%. Boston Scientific has declined 3% since the release. It trades at a book-value multiple of 0.8 and a sales multiple of 1.1 -- 80% and 72% discounts to health-care-equipment industry averages. Of firms evaluating Boston Scientific, eight, or 18%, advocate buying its shares.

3.

Capital One Financial

(COF) - Get Report

is a consumer-finance company that issues credit cards and makes loans. Second-quarter net income nearly tripled to $608 million. Per-share earnings swung from negative 64 cents to positive $1.78, far exceeding analysts' projected tally of 86 cents. Capital One shares have ascended 3% since the release. They sell for a price-to-projected-earnings ratio of 9.9 and a price-to-book ratio of 0.7 -- 25% and 69% discounts to peer averages. Roughly 29% of analysts covering Capital One Financial rate its stock a "buy."

2.

Textron

(TXT) - Get Report

, through its subsidiary Bell, builds helicopters and tilt-rotor aircraft for military and commercial markets. Textron also builds surveillance systems, armored vehicles and weapons. The company swung to a second-quarter profit of $82 million, or 27 cents a share, trouncing expectations for a profit of 9 cents. Textron's stock has soared 18% since the release. It trades at a forward earnings multiple of 14, on par with competitors' shares. Of analysts covering Textron, seven, or 58%, rate it "buy." A median target of $25 implies 22% of upside.

1.

Fifth Third Bancorp

(FITB) - Get Report

is an Ohio-based regional bank. Second-quarter profit tumbled 78% to $192 million, or 16 cents, landing well above analysts' 5-cent consensus. Revenue declined 13%, but the operating margin widened to 37% from 3.9%. Fifth Third shares have soared 17% since the quarterly report. They sell for a price-to-projected-earnings ratio of 13 and a price-to-book ratio of 0.8 -- 29% and 39% discounts to peer averages. Of analysts following the company, 24% rank its stock a "buy."

-- Reported by Jake Lynch in Boston.

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