Three companies announced earnings surprises today. These companies performed well over their most recent earnings calendar and are poised to continue to do well based on their fundamentals and their Strong Buy recommendations from our with POWR Ratings. While each company represents a different industry, each one is positioned to perform well in this economic environment and after.
FactSet Research Systems Inc. (FDS)
FDS provides financial data and analytics to global investment companies. The company reported earnings per share of $2.86, which beat the earnings estimate of $2.43, a surprise of 17.21%. It marks the fourth straight quarter that FDS has surpassed earnings estimates. FDS posted revenues of $378.08 million for the quarter ending May 2020.
The company benefits from a high client retention rate, a growing customer base, and a competitive pricing strategy. FDS is one of the few companies in the financial industry increasing dividends. The company announced a 7% dividend hike, which is the fifteenth straight year of dividend hikes. Some financial services companies may be experiencing lower revenues in this economy, but FactSet is a product that investment companies will always need.
FDS has a Strong Buy rating from POWR Ratings and is ranked 5th out of 134 companies in the Financial Services Industry.
Accenture plc (ACN)
ACN, which is based in Dublin, provides consulting, technology, and outsourcing services. The company reported earnings per share of $1.90, which surpassed estimates by 3.3%. Their net revenues of $10.99 billion were higher than the forecast by 0.7%. ACN forecasts strong bookings for the current quarter.
ACN is benefitting from a shift in focus to offering cloud and digital services. They are now managing the social media marketing strategies of their clients. New bookings grew by 4% to $11 billion for the quarter ending May 31st. Cloud, digital, and security services accounted for 70% of those bookings. These are products that have been doing well in this economy and will continue to do well as more companies switch to work from home arrangements.
ACN has a Strong Buy rating from POWR Ratings and is ranked 1st out of 14 companies in the Outsourcing-Tech Services Industry.
McCormick & Company, Inc (MKC)
MKC manufactures and distributes spices, seasoning mixes, and condiments. The company reported an adjusted EPS of $1.47 on revenue of $1.4 billion for the second quarter. The EPS and revenue figures beat expectations. MKC’s consumer segment, which includes Frank's Red Hot, Grill Mates, and its seasoning mixes, saw revenues increase 26%.
MKC benefited from the stay at home orders as consumers were stuck at home cooking. The company should continue to perform well while the economy struggles. As the job loses pile up, more consumers will need to save money by cooking at home. Additionally, the MKC's restaurant product segment will benefit as restaurants start to open up.
MKC has a Strong Buy rating from POWR Ratings and is ranked 4th out of 56 companies in the Food Makers Industry.
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MKC shares were unchanged in after-hours trading Thursday. Year-to-date, MKC has gained 5.63%, versus a -3.52% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
David Cohne has 20 years of experience as an investment analyst and writer. Prior to StockNews, David spent eleven years as a Consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers.
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