With all the talk of wild card "X" factors such as President Donald Trump's tariffs or instability in the Middle East, unsettling the stock market, you would logically expect the quarterly earnings season to be full of bad news. It is impossible to deny that the last quarter was a roller coaster ride for investors. However, it may surprise you to learn that over 75% of the S&P 500 exceeded their earnings expectations in their most recent quarterly report.
According to public filing data compiled by FactSet, 374 out of the 481 companies that released reports exceeded their per-share earnings expectations. By contrast, only 19 companies reported EPS "in line" with expectations, while 88 fell short. The revenue picture was a bit more evenly weighted but still offered solid wins for investors. Some 305 companies beat revenue expectations, while 175 fell short of the mark.
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The overwhelmingly positive performance means businesses in almost every sector successfully adjusted to market instability and thrived. It's certainly good news for investors and analysts, who will collectively hope that the strong quarter is a sign that things may be returning to normal on Wall Street. The recent announcement that Trump and Chinese President Xi Jinping have reached a tentative truce may go even further to calm the nerves of anxious investors.
With that said, some companies scored huge quarterly wins by radically outperforming consensus EPS expectations. According to FactSet, the biggest winner was Intel (NASDAQ: INTC), which exceeded EPS expectations by nearly 2,000%. The chipmaker announced EPS of $0.13, which was a massive improvement on the $0.01 that analysts had predicted. Intel's $12.67 billion in revenue also beat the consensus analyst predictions of $12.30 billion by 2.98%.
The next biggest winner on the EPS list was Carnival (NYSE: CCL), with $0.13. According to Benzinga, the consensus analyst expectations for Carnival were around $0.02. Carnival's performance was good enough to beat expectations by 550%. The cruise giant has a "Buy Now" rating from Stifel and Citigroup, which both recently raised their price expectations. Citi moved from $31 to $33, while Stifel went from $25 to $28.
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Travelers (NYSE: TRV) also posted a strong quarter with EPS of $1.91, which was good enough for third place on FactSet's list of biggest EPS surprises. Travelers' $11.81 billion in revenue also bested the prognosticators' $10.81 billion by 9.25%. Passive income investors might also like Travelers' 1.76% dividend, which translates to roughly $4.40 per share based on the current price of $262.02.
The remaining seven best performers on FactSet's top 10 EPS surprises are:
- GE Vernova (NYSE: GEV) +129.2%
- Valero Energy Corp. (NYSE: VLO) +116.9%
- Estee Lauder Cos. Class A (NYSE: EL) +107.9%
- Weyerhaeuser (NYSE: WY) +100%
- Nike (NYSE: NKE) Class B +79.6%
- Deckers Outdoor (NYSE: DECK) +65.5%
- Uber Technologies (NYSE: UBER) +63.5%
Taken as a whole, it's a very diverse list of companies operating across multiple sectors of the economy. To see the S&P 500 performing so strongly despite the recent headwinds is an encouraging sign.
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