Unexpected Earnings: 3 Stocks that Beat Analysts' Expectations
01-29 18:11uSMART

As earnings for the final quarter of 2023 continue to be reported, there is a mix of results among companies. While some, like Tesla (NASDAQ:TSLA), are falling short of expectations, there are others that are pleasantly surprising investors with stronger-than-expected financial performance. With only 10% of S&P 500 companies having reported their Q4 2023 results, 62% have announced profit and sales surprises, according to FactSet.

Let's take a closer look at three stocks that have exceeded analyst expectations:


IBM's stock (NYSE:IBM) soared by 11% following the release of its fourth-quarter financial results. The technology giant reported earnings per share (EPS) of $3.87, surpassing the expected $3.78. Revenue totaled $17.38 billion, slightly higher than the forecasted $17.30 billion. IBM's sales increased by 4% compared to the previous year. Notably, the company's Q4 gross margin was the highest since 1999. IBM expects $12 billion in free cash flow in 2024 and mid-single-digit revenue growth. Overall, IBM stock has seen a 38% increase over the last 12 months.


American Airlines (AAL)
American Airlines' stock (NASDAQ:AAL) rose by 8% after the company reported better-than-expected Q4 earnings and provided an optimistic outlook for the year ahead. The airline posted Q4 EPS of 29 cents on revenue of $13.10 billion, outperforming the predicted 11 cents on $13 billion in sales. American Airlines attributed its success to the continued strength in air travel post-pandemic, including record bookings over the recent holiday season. The company expects earnings of $2.25 to $3.25 per share for 2024, surpassing analyst expectations of $2.14 per share. While AAL stock had declined by 7% over the past year, the strong Q4 performance suggests a potential turnaround.


Service Now (NOW)
ServiceNow's stock (NYSE:NOW) performed well ahead of earnings and continued to impress with its Q4 results. The software company reported EPS of $3.11, surpassing the expected $2.78. Quarterly revenue reached $2.437 billion, marking a 26% YoY increase and surpassing Wall Street forecasts. ServiceNow attributed its strong performance to the rising demand for its AI products and the launch of 15 generative AI software offerings. The company provided optimistic guidance, expecting subscription revenue of $2.510 billion to $2.515 billion for Q1 2024, and projecting subscription revenues of $10.555 billion to $10.575 billion for the full year, representing a 22% YoY growth. NOW stock has seen significant gains, rising by 72% over the last 12 months and 305% over the past five years.

In summary, IBM, American Airlines, and ServiceNow have all delivered impressive earnings results, exceeding analyst expectations and driving their stock prices higher.


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