Let’s come right out and say it: The second quarter was a pretty ho-hum earnings season for the S&P 500.
A robust dollar and a horrendous commodities market combined to create a bleak outlook for Wall Street in the second-quarter. So bleak, in fact, that FactSet predicted S&P 500 earnings would actually contract by 0.7% in the first half of 2015, making for the worst half-year since 2009.
Earnings season isn’t quite over yet, but we’re more than a month into it, and most of the major stocks have reported. Still, we’ve got a pretty decent idea about how corporate America fared last quarter, and it was mostly a yawnfest.
Despite the broader environment, these 10 stocks bucked the trend, crushing estimates and emerging as some of the biggest earnings season winners in the stock market today.
Earnings Season Winners — Priceline (PCLN)
Market Capitalization: $66 billion
The online travel industry has been red-hot for a few years now, and there’s none bigger in that area than Priceline (PCLN). And just because Priceline is the only stock in the S&P 500 to trade for more than $1,000 per share doesn’t mean it’s expensive, per se.
Investors sure didn’t think it was expensive after second-quarter earnings, when PCLN stock jumped 8% on the heels of its results, which managed to beat both top- and bottom-line estimates. Revenue clocked in at $2.28 billion vs. the consensus $2.27 billion — a 7.4% increase — while earnings of $12.45 per share clobbered expectations for $11.98.
Hotel and rental car bookings drove growth, with each segment posting revenue growth above 20%. In a rapidly consolidating industry, Priceline is the big dog, and last quarter proved it.
Earnings Season Winners — Expedia (EXPE)
Market Capitalization: $16 billion
Wouldn’t you know it, the second-biggest player in the online travel game, Expedia (EXPE), also had a blowout quarter. It makes sense: A consolidating industry means better economics for those at the top.
EXPE stock shot 10% higher after posting Q2 results in late July, breezing past all-time highs in the process.
I took a look at Expedia earnings after its latest quarter, and you can understand why Wall Street reacted with such jubilance:
“Expedia’s second-quarter results were driven by room night growth, which actually accelerated from the year-ago quarter, growing at a 35% clip. A year ago, room night growth came in at just 25%. EXPE added 27,000 properties to its portfolio, which now sits at nearly 260,000 properties worldwide.
“Oh, and the EXPE board of directors also approved a 33% hike in its dividend, which now sits at 24 cents per quarter, an annual yield of about 0.8%. Nothing to write home about, but a great sign about the company’s confidence in its cash flow.”
Not too shabby. EXPE stock is up more than 35% in 2015 thus far.
Earnings Season Winners — Amazon (AMZN)
Market Capitalization: $250 billion
Amazon (AMZN) finds itself in the headlines this week — although not quite for the same reasons that it was less than a month ago. On July 24, AMZN stock was the talk of Wall Street after posting a surprise profit; shares of the e-commerce giant instantly rocketed 17% higher on the news.
Today, Amazon’s in the news as CEO Jeff Bezos spars with The New York Times over a story criticizing the intensity and lack of empathy at the workplace. But nevermind that, back to the bottom line.
The highlight of Amazon’s second quarter was the rapid growth of Amazon Web Services, or AWS, which makes up for just 8% of revenue but more than 36% of Amazon’s operating profits. With Wall Street constantly skeptical about Amazon’s long-term plan to take over the world tomorrow at the expense of profitability today, AWS gave some investors hope that the company could, you know, actually make money before it achieves world domination.
Earnings Season Winners — Google (GOOG, GOOGL)
Market Capitalization: $460 billion
Though reporting revenues that were in line with estimates at $17.72 billion, earnings per share absolutely crushed estimates, coming in at $6.99 vs. expectations for $6.70. New Google CFO Ruth Porat was able to rein in costs by cutting back on traffic acquisition costs, boosting the bottom line and giving Wall Street a reason to believe in Google (GOOG, GOOGL).
GOOG stock responded by immediately jumping 12% in after-hours trading.
But Google wasn’t done just yet. After its blowout earnings, the folks in Mountain View decided to undergo a complete corporate restructuring, creating a parent company named Alphabet that will hold two separate divisions, Google (with its traditional search business, Maps, Apps, Youtube, and Android) and then everything else.
Calico, Google Ventures, Google Capital, Nest, Google X, and Fiber will all operate separately from the core Google business. Investors — hopeful that the new structures will encourage innovation, encourage M&A activity, and provide more insight into the health of Google’s core business — bought GOOG stock in droves, adding $17 billion to Google’s market cap overnight.
Earnings Season Winners — Fortinet (FTNT)
Market Capitalization: $8 billion
Few names on Wall Street have fared as well as cybersecurity company Fortinet (FTNT), whose shares are up 55% already in 2015.
What has been driving FTNT stock higher? Firstly, there’s a seemingly insatiable appetite for cybersecurity stocks as hacks and data breaches become a part of everyday life, dominating headlines in the process.
And then there’s the incredible growth of Fortinet’s business itself, of course. Last quarter, Fortinet revenues jumped 30% to $240 million, and EPS came in at 11 cents. Both figures easily beat consensus expectations of $227.6 million and 9 cents, respectively.
Add in the fact that free cash flow more than doubled on a year-over-year basis to $74 million, and it’s no wonder Wall Street was chomping at the bit for FTNT stock, sending shares up 12% in the wake of its earnings.
Considering that the company has a proven knack for landing more and more Fortune 100 clients and million-dollar accounts, Fortinet shares look like they still have room to run.
Earnings Season Winners — Stamps.com (STMP)
Market Capitalization: $1.4 billion
Every company on this list demolished consensus expectations last quarter, but few did so in quite the fashion that online postage services company Stamps.com (STMP) did.
Revenue roared 41% higher on a year-over-year basis, jumping to $48.4 million, topping analyst expectations.
Adjusted non-GAAP EPS also easily exceeded estimates, clocking in at 97 cents per share vs. estimates for 71 cents per share. With management raising full-year EPS guidance to the $3.10 to $3.50 range, STMP stock posted the rare trifecta of good news — an EPS beat, a revenue beat, and higher full-year guidance — that Wall Street can’t get enough of.
Earnings Season Winners — First Solar (FSLR)
Market Capitalization: $5 billion
Shares of solar power giant First Solar (FSLR) are easily beating the market this year — entirely because of last quarter’s stellar results. Though the S&P is sideways this year, FSLR is up 12% in 2015. Shares would still be treading water for the year if it weren’t for 2Q earnings, though, when the results sent shares up 12% after the quarterly report on Aug. 4.
You can’t blame investors for their exuberance: Earnings jumped from 4 cents per share in the year-ago quarter to 93 cents last quarter, and revenue jumped to $896 million from $544 million. To give you an idea of how incredible those numbers are, analysts were expecting EPS of 49 cents on revenue of $790 million.
To top it all off, FSLR did its best Stamps.com impression, going for the trifecta by raising full-year EPS guidance to the $3.30 to $3.60 range, $1 better than the pros expected.
Earnings Season Winners — MGM (MGM)
Market Capitalization: $13 billion
Shares of resort and casino operator MGM (MGM) shot up nearly 10% on Aug. 4, immediately after an impressive second-quarter earnings report.
Revenue for the quarter was in line with estimates at $2.38 billion, but profits were a different story. EPS came in 72% above estimates, clocking in at 19 cents vs. the consensus 11-cent estimate.
The surprisingly positive results were driven by strength in domestic resorts, where casino-related revenues rose 5% year-over-year, driven by higher table games volume and presumably a slew of retirees flocking to slot machines. Slots volume was up 7% from the same quarter a year ago.
While it was nice to see the earnings beat, investors should be wary of MGM’s exposure to China as the country takes questionable steps to prop up its markets and get economic growth back on track. The numbers speak for themselves: MGM China revenues were down 33% year-over-year last quarter.
Earnings Season Winners — JCPenney (JCP)
Market Capitalization: $2.6 billion
Perhaps the biggest surprise winner this earnings season was JCPenney (JCP) stock, which tacked on more than 5% on Aug. 14 after JCP earnings and revenue both came in above expectations for the quarter ended Aug. 1.
There’s no doubt about it: JCPenney is still struggling, and betting on this turnaround still takes some major cajones. That said, numbers don’t lie, and, as InvestorPlace Feature Writer James Brumley points out, the numbers tell a clear story of improvement:
“In its second quarter of fiscal 2015, JCPenney lost 45 cents per share on $2.88 billion in revenue. Both were improvements on the numbers posted for the second quarter of 2014, when the company took a loss of 56 cents per share of JCP stock on $2.8 billion worth of revenue.
“Perhaps better still, this year’s Q2 earnings numbers topped the expected loss of 48 cents per share and the projected sales total of $2.86 billion. Same-store sales grew 4.1%, versus analyst expectations of 3.9% growth.”
JCP is certainly a stock to watch as new CEO Marvin Harrison tries to continue in the vein of outgoing CEO Myron Ullman, who basically spent his time trying to undo the disastrous and failed initiatives of Ron Johnson.
10 Earnings Season Winners — Nordstrom (JWN)
Market Capitalization: $15 billion
A JCPenney peer, old-school retailer Nordstrom (JWN) also emerged as one of the biggest winners this earnings season, with shares jumping adding more than 4% after an impressive earnings beat, raised guidance, and better-than-expected revenues got Wall Street looking on the bright side of things.
JWN stock posted EPS of $1.09 on revenue of $3.7 billion in the quarter ended Aug. 1. Both were well above Wall Street’s muted expectations, which called for EPS of 90 cents on revenue of $3.67 billion. Nordstrom raised full-year EPS guidance from the $3.65-$3.80 range to the $3.85-$3.95 range.
With same-store sales growth of 4.9% in the quarter and expansion plans in Canada underway, Nordstrom isn’t the flashiest stock out there, but it’s one to keep an eye on going forward.