It's been an acceptable third-quarter earnings season for most S&P 500 stocks. But results have been outstanding for companies blowing away their investors' expectations.
Seven S&P 500 companies, including Southwest Airlines, Uber Technologies and International Paper, blew away analysts' quarterly profit forecasts by 60% or more, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
These much-better-than expected earnings reports show how some of the stocks in the S&P 500 getting less attention than the Magnificent Seven are under-promising and overdelivering.
Sizing Up The S&P 500
Roughly 75% of the companies in the S&P 500 have reported quarterly profit for the third quarter.
And so far, three-quarters of those have topped expectations, says John Butters of FactSet. That's slightly less than the 77% that beat views in the past five years.
But companies that topped expectations did so by 4.6%. That, too, is below the five-year average of 8.5%. Since Sept. 30, most of the positive earnings surprises have come from companies in the financials, communication services and consumer discretionary sectors.
Where do you find the companies beating views by the most, though?
Biggest Earnings Beat
When it comes to beating expectations, Southwest Airlines is in a class of its own this past quarter.
The company earned 15 cents a share during the period. That topped expectations by a whopping 275%. That's more than any other S&P 500 company. Albeit, the stock is only up 6% this year, as its Composite Rating is just 55. Analysts think the company's profit will sink by 56% this year.
Are they being too hard on the airline?
Other Big Beats
Transportation services firm Uber Technologies is another source of a giant upside surprise. The company reported a third-quarter profit of $1.41 a share. That topped views by an impressive 127%. And that's on top of already reporting 316% earnings growth in the period.
Uber sports a 96 Composite Rating in part due to robust earnings growth. Analysts think its profit will rise 85% this year. And the stock is up 19% this year.
And then there's International Paper. The company earned 44 cents a share in the third quarter. That was 76% better than analysts thought it would be. Already this year, International Paper stock is up 54%. That gives it an RS Rating of 94.
It goes without saying these S&P 500 companies may not beat estimates by so much again this quarter. But for the time being, they all handed investors a welcome surprise.
Biggest S&P 500 Earnings Surprises
For the third quarter of 2024
| Company | Ticker | Surprise EPS % Q3 2024 |
|---|---|---|
| Southwest Airlines | LUV | 275% |
| Uber Technologies | UBER | 127.4 |
| International Paper | IP | 76 |
| Pfizer | PFE | 73.7 |
| EQT | EQT | 71.4 |
| Prologis | PLD | 66.1 |
| Allstate | ALL | 62.9 |
