6 Strong Earning Season Winners From March

A history of earnings surprise is a good sign that a company is managing market expectations and creating shareholder value. One reason for a company like Apple's (AAPL) consistent share appreciation in the past has been its ability to meet and exceed earnings expectations. 

In this screen we looked at companies that have recently released earnings (in March this year) that beat consensus targets. Furthermore, they have all consistently beat earnings over the last 4 reporting periods and have an average earnings surprise above 5%. 

The companies in this list are also becoming more profitable with margins above the average in their industry on the basis of trailing twelve month (TTM) gross, operating and pre-tax margins. 

Companies in this screen:

Ability to control costs while growing earnings is a valuable combination when analyzing a company. Do you think any of these profitable names will continue to surprise? Use this list as a starting point for your own analysis.

Interactive chart: Compare changes in analyst ratings over the past two years:

The average 1-year return on stocks in this list is 18%.

1. BankUnited, Inc. ( BKU): Operates as the holding company for BankUnited that provides various banking products and services to consumers, and commercial and middle-market businesses.

Market cap at $2.51B, most recent closing price at $24.96. 

Looking back: In Jun 2012: Reported EPS at 0.48 vs. estimate at 0.44 (surprise of 9.1%). In Sep 2012: Reported EPS at 0.48 vs. estimate at 0.44 (surprise of 9.1%). In Dec 2012: Reported EPS at 0.76 vs. estimate at 0.48 (surprise of 58.3%). In Mar 2013: Reported 0.47 vs. estimate at 0.45 (surprise of 4.4%). [Average earnings surprise at 20.22%].

TTM gross margin at 83.31% vs. industry average at 78.18%. TTM operating margin at 53.86% vs. industry average at 46.6%. TTM pretax margin at 42.21% vs. industry average at 26.2%.  

2. Diamond Offshore Drilling Inc. ( DO): Operates as an offshore oil and gas drilling contractor worldwide.

Market cap at $9.61B, most recent closing price at $69.11.

In Jun 2012: Reported EPS at 1.09 vs. estimate at 0.9 (surprise of 21.1%). In Sep 2012: Reported EPS at 1.28 vs. estimate at 1.02 (surprise of 25.5%). In Dec 2012: Reported EPS at 1.41 vs. estimate at 1.1 (surprise of 28.2%). In Mar 2013: Reported 1.27 vs. estimate at 1.16 (surprise of 9.5%). [Average earnings surprise at 21.08%].

TTM gross margin at 46.39% vs. industry average at 32.64%. TTM operating margin at 31.06% vs. industry average at 19.%. TTM pretax margin at 29.61% vs. industry average at 15.74%.  

3. First Republic Bank ( FRC ): Provides private banking, private business banking, investment management, brokerage, trust services, and real estate lending services in California, Nevada, and New York.

Market cap at $4.86B, most recent closing price at $37.52.

In Jun 2012: Reported EPS at 0.6 vs. estimate at 0.57 (surprise of 5.3%). In Sep 2012: Reported EPS at 0.72 vs. estimate at 0.71 (surprise of 1.4%). In Dec 2012: Reported EPS at 0.77 vs. estimate at 0.73 (surprise of 5.5%). In Mar 2013: Reported 0.85 vs. estimate at 0.73 (surprise of 16.4%). [Average earnings surprise at 7.15%].

 TTM gross margin at 88.94% vs. industry average at 78.18%. TTM operating margin at 57.2% vs. industry average at 46.6%. TTM pretax margin at 40.56% vs. industry average at 26.2%.  

4. Helmerich & Payne Inc. ( HP): Engages in the contract drilling of oil and gas wells in the United States and internationally.

Market cap at $6.19B, most recent closing price at $58.23.  

In Jun 2012: Reported EPS at 1.37 vs. estimate at 1.16 (surprise of 18.1%). In Sep 2012: Reported EPS at 1.36 vs. estimate at 1.24 (surprise of 9.7%). In Dec 2012: Reported EPS at 1.4 vs. estimate at 1.29 (surprise of 8.5%). In Mar 2013: Reported 1.36 vs. estimate at 1.29 (surprise of 5.4%). [Average earnings surprise at 10.42%].

TTM gross margin at 44.78% vs. industry average at 32.64%. TTM operating margin at 27.86% vs. industry average at 19.%. TTM pretax margin at 28.44% vs. industry average at 15.74%.  

5. Everest Re Group Ltd. ( RE): Underwrites reinsurance and insurance in the United States, Bermuda, and international markets.

Market cap at $8.01B, most recent closing price at $133.61.

In Jun 2012: Reported EPS at 4.25 vs. estimate at 3.8 (surprise of 11.8%). In Sep 2012: Reported EPS at 4.05 vs. estimate at 3.74 (surprise of 8.3%). In Dec 2012: Reported EPS at 0.8 vs. estimate at 0.29 (surprise of 175.9%). In Mar 2013: Reported 5.88 vs. estimate at 4.39 (surprise of 33.9%). [Average earnings surprise at 57.48%].

TTM gross margin at 22.23% vs. industry average at 16.75%. TTM operating margin at 22.23% vs. industry average at 13.76%. TTM pretax margin at 21.16% vs. industry average at 11.66%.  

6. SVB Financial Group ( SIVB): Operates as the bank and financial holding company that provides commercial banking and financial products and services.

Market cap at $3.19B, most recent closing price at $71.06. 

In Jun 2012: Reported EPS at 1.06 vs. estimate at 0.85 (surprise of 24.7%). In Sep 2012: Reported EPS at 0.94 vs. estimate at 0.88 (surprise of 6.8%). In Dec 2012: Reported EPS at 1.12 vs. estimate at 0.88 (surprise of 27.3%). In Mar 2013: Reported 0.9 vs. estimate at 0.88 (surprise of 2.3%). [Average earnings surprise at 15.28%].

TTM gross margin at 93.43% vs. industry average at 78.18%. TTM operating margin at 51.9% vs. industry average at 46.6%. TTM pretax margin at 38.19% vs. industry average at 26.2%.  

 

–Freda Ding, Kaptiall

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