The other kind of beat is one manufactured by management. Whether through cost cuts, aggressive accounting or stock buybacks, a company was able to boost its earnings per share. There was no true growth in business, but the number crunching made the quarter look much better than expected. Almost any company can pull this sleight of hand, Cramer said, which means the “upside” isn’t much of a surprise.
Investors should keep this in mind when reviewing a company’s performance. Instead of looking only at EPS, check the sales figures. They tell a much more accurate story.
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