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5 Stocks That Surprised Investors In The Second Quarter

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Earnings season remains underway, with 65 percent of S&P 500 companies having reported. So far, companies have beat earnings expectations at a record rate and earnings growth is expected to be the highest since the second quarter of 2010.

Even with elevated earnings expectations, 81 percent of S&P 500 companies that have reported have managed to exceed expectations. If the trend holds, the quarter will mark the highest percentage of earnings beat since the first quarter of 1994.

The earnings season has also helped propel the first company to trillion-dollar market cap status—Apple Inc.

(Click to enlarge)

Source: Thomson Reuters

Here are 5 companies whose earnings have impressed us:

#1 Advanced Micro Devices (NASDAQ:AMD)

 Q2 EPS of $0.14 beat by $0.01.

Revenue of $1.76B (+53.0% Y/Y) beat by $40M.

Investors have always loved a good comeback story, and few have been as impressive as AMD’s.

AMD shares have surged 94 percent ever since the company reported impressive Q2 earnings on July 25, taking them from the red zone to an 82.8-percent gain in the year-to-date. Some of the key highlights from the company’s latest report included top line growth of 53 percent--the highest in more than 20 quarters--and the fact that the company had managed to snap back from a long losing streak by posting net income of $156 million.

But even more importantly, AMD’s 64-percent growth in the Computing and Graphics division proved that it’s once again becoming competitive both in the desktop and in server chip businesses dominated by Intel Corp.

#2 Apple Inc. (NASDAQ:AAPL)

FY 17 Q3 EPS of $2.34 beat by $0.16.

Revenue of $53.3B (+17.4% Y/Y) beat by $870M. Related: Tesla Short Sellers Just Took A $1.7 Billion Hit

Just like AMD, Apple is another comeback story. The company went through a rough patch in 2016 after its revenue growth slipped into negative territory for three consecutive quarters, sparking fears that the days of the iPhone were finally over.

But the company’s latest scorecard proves that the iconic smartphone remains alive and well, with shipments clocking in at 41.3M, while ASP of $724 beat the Wall Street consensus of $694. It’s important to note that iPhone sales were strongest in China where sales surged 19 percent year-over-year to $9.55B.

It was, however, Apple’s Service business that impressed the most. Services revenue grew 31 percent to $9.55B, an all-time high and above the $9.2B consensus.

#3 JPMorgan Chase and Co (NYSE:JPM)

Q2 EPS of $2.29 beat by $0.07.

Revenue of $28.39B (+10.2% Y/Y) beat by $1.1B.

The financial sector was expected to be one of the better-performing sectors this earnings season, with revenue and earnings growth projected to be third-best behind only the energy and materials sectors, respectively. But so far the sector has disappointed, with 30 percent of companies failing to meet consensus earnings, one of the worst records.

Thankfully, the U.S.’ largest bank has not been one of those. JPMorgan was among the first of the big six banks to report earnings this season, managing to exceed both top-and bottom-line expectations.

Revenue growth of 10.2 percent stretched the bank’s streak of double-digit topline growth to two quarters while net income of $8.3 billion and EPS of $2.29 exceeded the benefit from tax reform. The robust profits were driven by a strong showing by the Consumer and Community Banking segment, which posted net income of $3.4B, up 53 percent year-over-year.

#4 SodaStream International (NASDAQ:SODA)

Q2 EPS of $1.14 beat by $0.41.

Revenue of $171.49M (+31.3% Y/Y) beat by $22.36M.

Shares of Israel-based consumer goods company SodaStream have surged 30 percent after the company reported impressive Q2 earnings yesterday that not only beat expectations but also proved to be some of the best ever by the company.

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But what caught investors’ fancy was the equally robust guidance that the company issued, proving that the latest set of results were not a fluke or a flash in the pan. The company upped its revenue growth projection for FY18 from +15 percent to +23 percent, while adding that it expects full-year EPS growth to clock in at +31 percent compared to earlier guidance of +8 percent.

The company said the strong growth came as a result of favorable FX tailwinds as well as strong demand for its products.

#5 Square Inc. (NYSE:SQ)

Q2 EPS of $0.13 beat by $0.01.

Revenue of $385M (+60.1% Y/Y) beat by $17.41M.

After a slow start to public life, shares of contactless payments market leader Square Inc. have surged nearly 110 percent in the year-to-date, with a nine-percent gain coming in the space of 24 hours after the company posted another monster quarter during yesterday’s earnings call.

Both revenue and EPS growth were the best since the company went public nearly three years ago. That marked the fifth consecutive quarter of accelerating revenue growth for Square.

The company’s products are enjoying strong adoption especially by big customers, with Square reporting that half of  its GPV (Gross Product Volume) came from large sellers that generate more than $125,000 in annualized GPV.

By Alex Kimani for Safehaven.com

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