The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Dave Sterman NEW YORK ( StreetAuthority) -- Where did the time go? By the end of this week, earnings season will have already reached a crescendo as the largest 1,000 U.S. stocks will have already released quarterly results. The flow of new reports starts to slow down after that. An early read on the current earnings season shows a clear trend: Roughly 69% of companies are delivering profit results that are better than analysts had expected, according to Thomson Reuters. That's right about in line with the last two quarters. On an aggregated basis, third-quarter sales are up 10% and profits are up 15%, compared with the same period a year ago. Few would have expected such a decent outcome with all of the headwinds roiling the economy and many industries. Another factor: Solid quarterly results -- relative to expectations -- are also the result of analysts cutting their forecasts too deeply. As a result, companies only needed to jump over a lower hurdle. And as has been the pattern, forward guidance appears more downbeat, relative to current forecasts. Still, it's clear that corporate profits are holding up reasonably well in such a tough economic environment. This bodes well for future results if the economy perks up a bit in 2012. So if many companies are doing well, then which companies are doing really well? Those companies should look like solid candidates for your portfolio, at least on the surface.
- Industrial conglomerate Textron (TXT) posted solid profit margins, thanks to still-strong results at its Bell Helicopter division. But the Textron's Cessna plane division is struggling for new customers, and quarterly results may weaken in coming quarters.
- Knight Capital (KCG) strongly benefited from the stock market volatility in July and August, which created wide bid/ask spreads in its market-making business. Volatility dropped in September and the current quarter is unlikely to deliver the same upside surprise.
- Cytec Industries (CYT), which makes a range of industrial paints and resins, saw robust demand last quarter, but has already seen business slow more recently and is hunkering down for a period of upcoming softness by closing a key plant in Brazil.