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. (See who beat analysts by 258 percent.)
They are ordered by outperformance, from smallest to biggest surprise.
10. JPMorgan Chase 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 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 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 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 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 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 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 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, 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.
Earnings per share beat: 223%
1. Fifth Third Bancorp 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."
Earnings per share beat: 258%.
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Disclosures:
Disclosure information was not available for Lynch or his company.