These 3 Companies Exceeded Earnings Expectations Last Quarter
Investors should view each earnings season as the perfect opportunity to reassess their holdings and gain important insight into the companies that are worth allocating capital towards. Oftentimes, new leaders will emerge following this critical time for equities that go on to trend higher during the quarter. On the other hand, companies that don’t meet expectations are punished severely. This leads us to another important factor to consider during earnings season – the market reaction to the report is truly what matters, not necessarily the actual numbers from the report.
While one good quarter doesn’t necessarily mean investors should load up on shares of a company, it’s definitely a good sign that things are clicking internally. Combine a solid earnings beat with long-term growth trends and a strong financial position and it becomes a lot easier to pull the trigger on a new buy. We’ve already seen some attractive earnings reports to start the year, which could indicate that good things are yet to come for shareholders of these stocks.
That’s why we’ve put together the following list of 3 stocks with earnings beats to buy now. Let’s take a further look below.
United Parcel Service (NYSE: UPS)
Many investors might be wondering “What can brown do for you?” after this air freight & logistics giant delivered an impressive Q4 earnings report that sent shares to new all-time highs. United Parcel Service delivered Q4 EPS of $3.59, beating consensus estimates by $0.49 per share. The company also boosted its dividend by 49% to $1.52 per share and delivered a very upbeat outlook, which points to a strong 2022 for the logistics powerhouse. Adding shares of industry-leading companies like UPS for the long-term makes a lot of sense, especially with so much evidence that its business model is thriving.
United Parcel Service has three principal business segments, U.S. domestic, International, and Supply Chain & Freight, and is the world’s largest package delivery company. It’s definitely one of the top names in transportation for long-term investors to consider thanks to strong trends such as the rise of e-commerce, which will likely lead to increased delivery volumes going forward. With shares breaking out of a 9-month base following the Q4 report, this blue-chip stock is poised to outperform going forward and could be a smart buy.
Alphabet is perhaps the best big tech stock to own for the long-term, evident in the company’s recent homerun Q4 earnings report. The world’s leading internet search provider delivered Q4 EPS of $30.69, beating consensus estimates by $3.84, and all but confirmed that the demand for internet advertising is strong regardless of all of the uncertainty in the economy. Perhaps the biggest news from the release was the fact that the company announced its board has approved a 20-for-1 stock split, which could be a massive catalyst for the stock in the coming months.
When you dive deeper into Alphabet’s business model, it’s easy to recognize why it is an ideal core holding for any portfolio. The company’s search advertising segment is a cash-generating machine, YouTube ad revenue is picking up steam and generated more than Netflix last quarter, and Google Cloud’s growth is also accelerating. There are also intriguing areas like artificial intelligence, autonomous vehicles, and smartphones that could lead to additional long-term price appreciation for this mega-cap tech stock. The only real issue here is the threat of the Department of Justice’s antitrust lawsuit, but that could take years to play out, which means adding shares of Alphabet makes plenty of sense after such a knockout quarter.
Thermo Fisher Scientific Inc. (NYSE: TMO)
It’s always a good sign when a company raises its outlook after a strong earnings report, which is exactly the case with Thermo Fisher Scientific. It’s a leading provider of life science tools and services to end markets such as pharmaceutical companies, biotech companies, academic and government institutions, healthcare companies, and more. Thermo Fisher just delivered an adjusted EPS of $6.54, which beat the consensus estimates by $1.72. The company also raised its 2022 guidance, as the scientific instruments provider now expects 2022 revenue of $42 billion, up from the previous $40.7 billion.
It’s important to note that Thermo Fisher has been seeing a nice bump in revenue due to COVID testing, which generated $2.45 billion in Q4. While this could eventually taper off, investors should anticipate that trend to continue for at least the first half of 2022. Thermo Fisher has also been active in the M&A space, including the recent $17.4 billion acquisition of PPD, a leading global provider of clinical research services to the biopharma and biotech industry. This should boost the company’s revenue by billions in 2022 and is the sign of a company that remains focused on maintaining its wide moat.