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Alex Kimani

Alex Kimani

Writer, Divergente Research LLC

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Divergente Research LLC and Safehaven.com. 

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The Biggest Winners Of Q2 Earnings Season

Market

The Q2 2018 earning season is well and truly underway, with a total of 36 companies having delivered their scorecard. Of those, 30 have met or exceeded earnings estimates while six have missed.

Of the six that have missed, only two—Wells Fargo Co (NYSE:WFC) and Citigroup Inc.(NYSE:C)—belong to the S&P 500. The pair have failed to make the cut after Wells Fargo missed on both top-and bottom-line estimates, while Citigroup beat on earnings but revenue fell below expectations.

But overall, S&P 500 companies have so far been outstanding, with 85 percent having exceeded earnings estimates. That’s well above the long-term average of 64 percent and more than last quarter’s mark of 75 percent.

Revenues have not disappointed, either, with 85 percent exceeding compared to the long-term average of 60 percent.

Without further ado, here are five of the biggest winners this earnings season so far.

#1 EXFO Inc. (NASDAQ:EXFO)

Earnings Beat :71.4%

EXFO Inc. is a leading provider of network testing, monitoring and analytics tools for communication services providers, network equipment manufacturers, web-scale companies and data centers. The company reported GAAP EPS of -$0.02, considerably lower than the Wall Street consensus of -$0.07. Q2 revenue of $72.2M represented a 23.4 percent Y/Y improvement.

Related: The Dow Is Delirious

Apart from the narrower loss, EXFO reported improvements in other key metrics including a 199-basis-point gross margin improvement to 59.9 percent; Selling and Administrative expenses fell to 22.3 percent of sales compared to 22.7 percent in Q2 2017 while bookings improved 14.8 percent Y/Y to $73.1M.

#2 Helen of Troy (NASDAQ:HELE)

Earnings Beat: 23.3 percent

Helen of Troy is a global designer, developer and distributor of a wide portfolio of brand-name consumer products. The company reported GAAP EPS of $1.64, well above the consensus estimate of $1.33. Revenue clocked in at $354.68M, which though a 1.4 percent Y/Y contraction was still $20.93M above estimates.

HELE stock was up 12 percent after the earnings report.

#3 Saratoga Investment Corp (NYSE:SAR)

Earnings Beat: 18.5 percent

Saratoga is a business development company that provides customized financial solutions for middle-tier companies in the United States. The company reported second quarter GAAP EPS of $0.64 managing to handily beat average projections for $0.54. Meanwhile, Total Investment Income of $10.49M represented a 20.4 percent Y/Y climb.

SAR stock sports a juicy 8.24 percent dividend yield (fwd). The shares have, however, lately been hammered after the company announced a  secondary stock offering of 1.15M shares of common stock which it says it intends to use for investing in middle-market companies.

#4 Commerce Bankshares (NASDAQ:CBSH)

Earnings Beat:13.5 percent

Commerce Bankshares is a Missouri-based bank-holding company. The company posted GAAP EPS of $1.01 thus managing to beat the consensus of $0.89. Revenue of $312.58M was good for a 5.8 percent Y/Y growth but missed the consensus estimate by $4.12M.

CBSH stock has jumped four percent after charge-offs declined to $10.0M compared to $10.8M a year ago.

#5 JPMorgan Chase & Co. (NYSE:JPM)

Earnings Beat:3 percent

America’s largest bank reported earnings on July 13, along with peers Citigroup, Wells Fargo, First Republic Bank (NYSE:FRC) and PNC Financial Services(NYSE:PNC). Only JP Morgan and PNC Financial Services managed to exceed both top-and bottom-line estimates while the rest posted mixed result.

JPM reported non-GAAP EPS of $2.29 thus exceeding the consensus by $0.07. Q2 revenue clocked in at $28.39 billion, a good $1.1B above Wall Street’s average projection. According to JPM chairman and CEO Jamie Dimon, the strong earnings came thanks to good global economic growth and strong spending by both business and consumers.

By Alex Kimani for Safehaven.com

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