In this article we will take a look at the 10 stocks that beat the earnings estimates.
Analysts and investors have been watching this earnings season very closely to evaluate the impact of mass vaccination and economic recovery on different industries. Most U.S stocks have eased investors’ concerns by beating expectations. So far, nearly 90 percent of S&P 500 companies have surpassed the consensus estimates.
Some of the notable stocks that posted upbeat earnings recently include Moderna, Inc. (NASDAQ: MRNA), Monster Beverage Corporation (NASDAQ: MNST), Motorola Solutions, Inc. (NYSE: MSI), Duke Energy Corporation (NYSE: DUK), Zillow Group, Inc. (NASDAQ: Z) and ViacomCBS Inc. (NASDAQ: VIAC).
The record earnings season was mainly driven by strong consumer spending as life returned to normal in most parts of the world. The impressive earnings growth made Goldman Sachs lift its guidance for the S&P 500 Index. Goldman analysts David Kostin now expects the index to hit 4,700 by the end of 2021, up from its previous outlook of 4,300.
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Let’s now start our list of the 10 stocks that that beat the earnings estimates.
10 Stocks that Beat the Earnings Estimates
10. Moderna, Inc. (NASDAQ: MRNA)
Number of Hedge Fund Holders: 39
Moderna, Inc. stock has climbed nearly 20 percent since reporting record financial results for the second quarter, mainly driven by solid sales of its Covid-19 vaccine. The Massachusetts-based biotechnology company reported earnings of $6.46 per share for the three months ended June 30, compared to a loss of 31 cents per share in the year-ago quarter.
Revenue for the quarter came in at $4.35 billion, significantly higher than just $67 million in the comparable period of 2020. The results were well above analysts’ average estimate of $4.96 per share for earnings and $4.21 billion for revenue.
Speaking on the results, CEO Stéphane Bancel said, “I am proud of the progress our teams at Moderna, Inc. have made in the past quarter in advancing our development pipeline while addressing a global pandemic and quickly establishing global manufacturing and commercial organizations.”
Moderna, Inc. said it has inked advance purchase agreements (APA) worth $20 billion for anticipated product sales during the current fiscal year. That’s up from the $19.2 billion figure announced in May.
In addition, the company also updated its Covid-19 dose capacity guidance. It expects dose capacity for its coronavirus vaccine in the range of 800 million to 1 billion doses for 2021 and between 2-3 billion doses for 2022.
Like Monster Beverage Corporation, Motorola Solutions, Inc., Duke Energy Corporation, Zillow Group, Inc. and ViacomCBS Inc., Moderna, Inc. is on investors’ radar after posting upbeat results.
In the Q2 2021 investor letter of Baillie Gifford, the fund mentioned Moderna, Inc., and how it became one of its top performers. Here‘s what they said:
“Among the top contributors to Fund performance in the second quarter was Moderna. Moderna has just reported its first profitable quarter in the company’s history – net income for the most recent quarter was $1.2 billion. It reported revenue of $1.9 billion, an impressive increase compared to $8 million a year ago, driven by the sales of its Covid-19 vaccine. Moderna is expecting to deliver up to 1 billion vaccine doses in 2021 and is in discussions to increase global supply to governments around the world. Our long-term focus remains on the transformational potential of Moderna’s technology and its ability to address different diseases.”
9. Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN)
Number of Hedge Fund Holders: 39
Biotechnology company Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) recently announced better-than-expected financial results for the second quarter, helped by increased use of its Covid-19 treatment across the U.S. Regeneron Pharmaceuticals, Inc. reported earnings of $27.97 per share for the quarter ended June 30, representing a surge of nearly 4-folds from the year-ago quarter.
Excluding certain items, its adjusted earnings improved to $25.80, well ahead of the consensus forecast of $17.90 per share. In addition, revenue for the quarter skyrocketed 163 percent on a year-over-year basis to $5.139, crushing the consensus forecast of 3.963 billion.
If we look at the performance of its key drugs, revenue from its coronavirus drug REGEN-COV increased to $2.59 billion, beating the estimate of $1.5 billion. In comparison, revenue from its eye disease medicine Eylea jumped nearly 33 percent to $2.33 billion, while revenue from eczema drug Dupixent climbed 59 percent to $1.50 billion.
Like Monster Beverage Corporation, Motorola Solutions, Inc., Duke Energy Corporation, Zillow Group, Inc., ViacomCBS Inc. and Moderna, Inc., Regeneron Pharmaceuticals Inc. is on investors’ radar after posting upbeat results.
CEO Leonard Schleifer expressed his satisfaction with the results. He said in a statement, “Regeneron Pharmaceuticals, Inc. had outstanding performance in the second quarter during which we delivered to the U.S. government the entire order for our COVID-19 antibody cocktail and recognized record global sales from our EYLEA and Dupixent franchises.”
Polen Focus Growth Fund, in its Q1 2021 investor letter, mentioned Regeneron Pharmaceuticals, Inc.. Here is what the fund said:
“We eliminated our position in Regeneron Pharmaceuticals also to help fund the Amazon addition. Regeneron’s revenue and earnings continue to grow roughly in line with our expectations. We believe Regeneron has a differentiated R&D model that has allowed it to bring novel biologic therapies to market in several therapeutic areas. That said, we believe Regeneron has intermediate-term risks that make a continued holding more difficult, particularly considering the recent opportunities we have seen for the Portfolio.
The company’s largest drug, Eylea, may face increasing competition as new competitive therapies have been approved, albeit without Eylea’s advantaged safety profile. In addition, the end of Eylea’s patent life coincides with a period when the U.S. government is seeking avenues to lower the reimbursement for certain drugs like Eylea. We believe Regeneron has many opportunities for continued growth in the coming years, and the competitive advantages from its proprietary drug development process remain intact. However, we feel the investment opportunity in Amazon was a better use of capital.”
8. Motorola Solutions, Inc. (NYSE: MSI)
Number of Hedge Fund Holders: 29
Shares of Motorola Solutions, Inc. hit a new 52-week high of $231.89 after announcing solid profit and sales for the second quarter ended July 3. Motorola Solutions, Inc. reported earnings of $1.69 per share, more than doubled from the comparable period of 2020. On an adjusted basis, the company earned $2.07 per share, surpassing analysts’ average estimate of $1.92 per share.
Revenue came in at $2 billion, up 22 percent from the year-ago quarter. Motorola Solutions, Inc. enjoyed growth across its flagship segments. Revenue from its products and systems integration business rose 24 percent, while software and services sales jumped 19 percent.
Commenting on the quarter, CEO Greg Brown said, “Our Q2 results were outstanding, highlighted by strong double-digit growth in both segments. The continued strong demand for our mission-critical technologies is driving our increased expectations for the full year.”
Motorola Solutions, Inc. raised its financial guidance for FY 2021. It expects adjusted earnings in the range of $8.88-$8.98 per share for the full year, compared to its previous outlook between $8.70-$8.80 per share. Moreover, revenue is expected to grow in the range of 9.5-10 percent, versus its earlier growth forecast of 8-9 percent.
Like Monster Beverage Corporation, Duke Energy Corporation, Zillow Group, Inc., ViacomCBS Inc. and Moderna, Inc., Motorola Solutions, Inc. is on investors’ radar after posting upbeat results.
Wedgewood Partners, in its Q1 2021 investor letter, mentioned Motorola Solutions, Inc.. Here is what the fund said:
“Motorola Solutions, Inc. saw a rebound in orders back to record levels in its North American Land Mobile Radio (LMR) business – where it enjoys a virtual monopoly – along with double-digit operating earnings growth in its software and services segment. COVID-19 posed some temporary challenges to Motorola’s selling organization; however, public service demand for more sophisticated and flexible emergency video and communications solutions stayed strong. The Company is capable of generating double-digit top-line growth as new federal spending should help expand state and local communication budgets. Despite a considerably better funding backdrop for Motorola’s largest customers, the stock trades at a multiple not too different compared to when things were not nearly as optimistic. As a result, Motorola continues to be a top holding (number 3) in our portfolio.”
7. Duke Energy Corporation (NYSE: DUK)
Number of Hedge Fund Holders: 34
Electric power and natural gas holding company Duke Energy Corporation also beat expectations for the second quarter. Duke earned 96 cents per share for the three months ended June 30, compared to a loss of $1.13 per share in the same period last year.
On an adjusted basis, earnings rose from $1.12 per share to $1.15 per share, beating the consensus forecast of $1.10 per share. Revenue came in at $5.76 billion, higher than $5.42 billion in the year-ago quarter.
Speaking on the results, Duke’s CEO, Lynn Good, said, “Our strong second-quarter results demonstrate the continued execution of our clean energy strategy. “We recently passed 10,000 MW of renewable energy on our path to net-zero carbon emissions by 2050. We’re investing in our transmission and distribution assets to strengthen grid resiliency, accommodate more renewables and support state economic development efforts.”
Duke Energy Corporation also reaffirmed its profit outlook for 2021. It expects adjusted earnings in the range of $5-$5.30 per share for the full year. Offering long-term guidance, the company added that it expects its adjusted earnings to grow between 5-7 percent through 2025.
6. Monster Beverage Corporation (NASDAQ: MNST)
Number of Hedge Fund Holders: 45
Energy drinks maker Monster Beverage Corporation recently announced its financial results for the second quarter above expectations. Monster Beverage Corporation reported earnings of 75 cents per share, up 29 percent from 59 cents per share in the year-ago quarter.
Revenue for the quarter climbed 33.6 percent on a year-over-year basis to $1.46 billion. The results exceeded analysts’ average estimate of 67 cents per share for earnings and $1.38 billion for revenue. The strong performance was mainly driven by the Monster Energy Drinks segment, which posted revenue of $1.37 billion, a surge of 33 percent from the comparable period of 2020.
Monster Beverage Corporation CEO Rodney Sacks expressed his satisfaction with the results. Sacks said in a statement, “We are pleased with our record financial results for the second quarter, despite the impact of the COVID-19 pandemic and particularly of the Delta variant. The energy drink category, and in particular our Monster Energy® brand, continues to demonstrate sustained growth in most of our markets.”
5. Kellogg Company (NYSE: K)
Number of Hedge Fund Holders: 32
Packaged food giant Kellogg enjoyed elevated demand for its products during the Covid-19 pandemic. Its food products range from crackers and snacks to protein bars and vegetarian burgers. While life has pretty much returned to normal, Kellogg continues to do well in terms of financial performance.
The company last week announced earnings of $1.11 per share for the quarter ended July 3, slightly higher than $1.02 per share in the year-ago period. On an adjusted basis, Kellogg earned $1.14 per share, ahead of the consensus forecast of $1.03 per share.
Revenue inched up 3 percent on a year-over-year basis to $3.555 billion, surpassing analysts’ average estimate of $3.431 billion. Overall quarterly sales were mainly driven by Kellogg’s double-digit growth in emerging markets.
Speaking on the performance, CEO Steve Cahillane said, “Our second quarter results again highlighted the resilience and determination of our organization as well as the effectiveness of our Deploy for Growth strategy and reshaped portfolio. “On a 2-year basis, taking into account the lapping of an unusual 2020, we continued to deliver a balance of strong top-line growth, consumption growth, profitability, and cash flow generation.”
Kellogg reiterated its sales outlook for 2021. The company expects revenue growth in the range of 0-1 percent for the full year. The guidance is almost in line with the consensus forecast for a 0.8 percent increase.
4. Cigna Corporation (NYSE: CI)
Number of Hedge Fund Holders: 53
Leading health insurer Cigna recently announced better-than-expected financial results for the second quarter. The company reported earnings of $4.25 per share for the three months ended June 30, compared to $4.73 per share in the same period last year. Excluding certain items, the adjusted earnings of $5.24 per share were above the consensus forecast of $4.96 per share.
Revenue increased 10 percent on a year-over-year basis to $43.13 billion, ahead of analysts’ average estimate of $28.53 billion. Pharmacy revenue in the quarter jumped over 13 percent to $30.05 billion, beating the estimates of $28.53 billion. If we look at Cigna’s consumer base, pharmacy customers rose 5 percent to 101.93 million.
Commenting on the quarter, CEO David Cordani said, “Our more than 70,000 employees continue rising to the moment, delivering for our customers, patients, and clients during a period of ongoing uncertainty around the world. Our second quarter results were solid, as we continue to drive our business forward and invest to fuel our sustained long-term growth.”
Cigna also raised its sales outlook for 2021. It expects to report a minimum revenue of $170 billion for the full year, compared to its earlier forecast of at least $166 billion.
3. Datadog, Inc. (NASDAQ: DDOG)
Number of Hedge Fund Holders: 44
Datadog has grown from a small startup in 2010 to a leading software company with a market value of over $40 billion. The company recently delivered impressive results for the second quarter. Its adjusted of 9 cents per share crushed analysts’ average estimate of 3 cents per share.
Moreover, revenue for the quarter climbed 67 percent on a year-over-year basis to $235.5 million, exceeding the consensus forecast of $212.5 million. One of the main drivers behind robust sales growth was a strong surge in big customers.
CEO Olivier Pomel said in a statement, “Our high growth at scale demonstrates that we continue to be a trusted partner in our customers’ digital transformation and cloud migration journeys. We continue to expand the features and functionality of our cloud native end-to-end observability platform. Meanwhile, we are just getting started on our journey to break down silos between DevOps and Security teams with our Cloud Security Platform.”
Datadog also updated its financial guidance for FY 2021. It expects adjusted earnings in the range of 26-28 cents per share for the full year, well above its previous forecast of 13 cents-16 cents per share. Revenue is expected to come between $938-$944 million, compared to its earlier outlook between $880-$890 million.
2. Zillow Group, Inc. (NASDAQ: Z)
Number of Hedge Fund Holders: 82
Online real estate marketplace company Zillow recently announced its second-quarter results above expectations. It reported adjusted earnings of 44 cents per share for the second quarter ended June 30. In comparison, the company had reported a loss of 17 cents per share in the year-ago quarter when it was struggling due to the negative effects of Covid-19 on its business.
Revenue for the quarter increased to $1.31 billion, well above $768 million in the comparable period of 2020. The results easily surpassed the consensus forecast of 24 cents per share for adjusted earnings and $1.28 billion for revenue.
Praising Q2 results, CEO Rich Barton said, “Zillow is making rapid and significant progress toward building a seamless, integrated real estate experience for our customers and partners. Our strong second-quarter results show how well we’re executing on the three- to five-year growth objectives we announced in 2019.”
Looking forward, Zillow expects to report revenue in the range of $1.93 billion to $2.05 billion for the third quarter. The Q3 outlook is well ahead of $1.45 billion projected by analysts.
RiverPark Funds, in its Q1 2021 investor letter, mentioned Zillow Group, Inc. (NASDAQ: Z). Here is what the fund said:
“With its number one ranking in real estate brand awareness, and more than 200 million monthly unique users and 10 billion visits last year to its mobile apps and websites, Zillow is the leader in online real estate. The company has historically focused on the $20 billion real estate advertising market through its IMT segment but is now also targeting the more than $2 trillion home transaction and related services market in its Homes and Mortgages segments. Just as the internet disrupted travel bookings, job search, home movie viewing, and car purchasing, among other industries, Zillow is disrupting residential real estate by radically simplifying real estate transactions, including inspections, appraisals, title, insurance, mortgages, and buying and selling. Zillow co-founder and CEO Rich Barton has deep experience in disrupting industries, having founded Expedia and co-founding Glassdoor (Rich is also on the board of Netflix).
Zillow’s growing, high margin, high cash flow media business (its IMT segment generated $556 billion of EBITDA on $1.5 billion of revenue last year) is funding the explosive growth of its Homes and Mortgages sector, which has grown from zero in 2017 to $1.9 billion revenue last year. The two businesses work synergistically to provide Zillow with scale and data advantages, as well as low customer acquisition costs. We believe the company’s IMT segment will continue its high-margin, double-digit growth (last year IMT revenue and EBITDA grew 33% and 83%, respectively) and its Homes and Mortgages segment growth will accelerate post-COVID, with margins turning from negative to positive as the business scales.”
1. ViacomCBS Inc. (NASDAQ: VIAC)
Number of Hedge Fund Holders: 89
Strong streaming revenue and solid year-over-year growth in subscriptions drove ViacomCBS’ financial results for the second quarter. The mass media and entertainment company reported earnings of $1.50 per share, well above 83 cents per share in the same period last year. On an adjusted basis, the company earned 97 cents per share, just ahead of the consensus forecast of 96 cents per share.
Revenue came in at $6.564 billion, compared to $6.075 billion in the year-ago quarter. Analysts, on average, were looking for $6.488 billion. If we look at the performance of key segments, ads revenue jumped 24 percent on a year-over-year basis amid exclusive broadcasts of several sporting events during the quarter.
Moreover, affiliate revenue increased 9 percent, mainly due to expanded distribution. In comparison, streaming revenue skyrocketed 92 percent on a year-over-year basis, fueled by robust growth in advertising revenue across ViacomCBS’ digital video platforms.
Speaking on the results, CEO Bob Bakish said, “In a quarter of strong business performance, including growth in advertising and affiliate, streaming was a standout. We continued to accelerate our global streaming momentum and delivered phenomenal results across our flagship streaming services. For the second consecutive quarter, Paramount+ fueled more than 6 million additions to our global streaming subscription base, which now reaches over 42 million. This growth was driven by the power of the service’s differentiated content strategy and expanding content slate. Looking ahead, we’re excited about our opportunity to build on this momentum, as we scale Paramount+’s content offerings across genres and expand our reach with global audiences.”
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