5 Stocks That Surpassed Earnings Expectations

In this article, we discuss the 5 stocks that surpassed earnings expectations. If you want to read our detailed analysis of these companies, go directly to the 10 Stocks That Surpassed Earnings Expectations.

5. The Goldman Sachs Group, Inc. (NYSE:GS)

Number of Hedge Fund Holders: 61

Shares of The Goldman Sachs Group, Inc. (NYSE:GS) rose nearly two percent in the pre-market trading session on Friday, 15 October 2021, after the banking giant crushed expectations for the third quarter.

The Goldman Sachs Group, Inc. (NYSE:GS) reported earnings of $14.93 per share for the three months ended 30 September 2021, well above $8.98 per share in the same period last year. Revenue for the quarter jumped 26 percent on a year-over-year basis to $13.6 billion.

Analysts were expecting Goldman Sachs Group, Inc. (NYSE:GS) to report earnings of $10.14 per share on revenue of $11.72 billion.

If we see the performance of key divisions, revenue from the investment banking segment climbed 88 percent to $3.70 billion, revenue from the consumer and wealth management segment jumped 35 percent to $2.02 billion, while global markets revenue rose 23 percent to $5.61 billion. In comparison, asset management revenue fell 18 percent to $2.28 billion in the quarter.

4. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Holders: 72

Shares of The Charles Schwab Corporation (NYSE:SCHW) hit an all-time high of $81 on Friday, 15 October 2021, after the Texas-based financial services company announced strong financial results for the third quarter.

The Charles Schwab Corporation (NYSE:SCHW) reported adjusted earnings of 84 cents per share, beating the consensus forecast of 81 cents per share. Revenue came in at $4.57 billion, ahead of analysts’ average estimate of $4.52 billion. The company had reported earnings of 51 cents per share on revenue of $2.45 billion in the comparable period of 2020.

Speaking on the results, CFO Peter Crawford said:

“Consistent execution of our strategy and sustained business momentum, in combination with our diversified revenue model, helped produce impressive financial performance in the third quarter.”

3. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Holders: 87

Citigroup Inc. (NYSE:C) recently came into the limelight after announcing better-than-expected financial results for the third quarter. The New York-based bank reported earnings of $2.15 per share, significantly higher than $1.36 per share in the year-ago quarter.

Revenue came in at $17.2 billion, marginally down from $17.3 billion in the comparable period of 2020. Analysts were expecting Citigroup Inc. (NYSE:C) to post revenue of $16.98 billion.

If we see the year-over-year performance of key segments, revenue from the institutional clients group rose 4 percent to $10.8 billion, while global consumer banking revenue fell 13 percent. In addition, Citigroup Inc. (NYSE:C) announced that it repurchased 43 million shares of its common stock during the quarter.

Commenting on the quarter, CEO Jane Fraser said:

“The recovery from the pandemic continues to drive corporate and consumer confidence and is creating very active client engagement as you can see through our strong results in Investment Banking and Equity Markets, both up approximately 40% year-over-year, in addition to double- digit fee growth in Treasury and Trade Solutions as we help our clients reposition their supply chains. And while strong consumer balance sheets have impacted lending, we are seeing higher consumer spending across our cards products. We also continue to show momentum in deposits and wealth management AUM as well as growing engagement across our digital channels. Overall, our revenues were 3% higher than last year excluding the impact of the sale of our consumer business in Australia.”

2. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Holders: 87

Shares of Bank of America Corporation (NYSE:BAC) hit a new 52-week high of $46.27 on Friday, 15 October 2021, after the Charlotte-based financial services holding company posted better-than-expected results for the third quarter.

Bank of America Corporation (NYSE:BAC) reported earnings of 85 cents per share, beating the consensus forecast of 71 cents per share. Revenue came in at $22.8 billion, ahead of the consensus forecast of $21.68 billion. The company had reported earnings of 51 cents per share on revenue of $20.3 billion in the same period last year.

Discussing the results, CEO Brian Moynihan said in a statement:

“We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.”

1. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Holders: 94

Shares of Wells Fargo & Company (NYSE:WFC) rose more than five percent in the morning trading session on Friday, 15 October 2021, after the banking giant surpassed expectations for the third quarter.

Wells Fargo & Company (NYSE:WFC) reported earnings of $1.17 per share for the three months ended 30 September 2021, up from 70 cents per share in the year-ago quarter. Revenue for the quarter came in at $18.834 billion, down from $19.316 billion in the comparable period of 2020. The results exceeded analysts’ average estimate of $1 per share for earnings and $18.273 billion for revenue.

If we look at the important growth indicators, net interest income for the quarter slipped 5 percent on a year-over-year basis to $8.909 billion amid lower loan balances. Wells Fargo & Company (NYSE:WFC) reported that average loans for the quarter decreased 8 percent to $854.0 billion. On the bright side, average deposits for the quarter rose 4 percent to $1.451 trillion.

In addition, Wells Fargo & Company (NYSE:WFC) announced that it repurchased $5.3 billion worth of its common stock during the quarter. Moreover, it also raised the dividend from 10 cents per share to 20 cents per share.

Speaking on the results, CEO Charlie Scharf said:

“The actions we’re taking to improve operating effectiveness and financial returns are coming through in our results, in addition to the benefits we’re experiencing from the economic recovery. We recorded a $1.7 billion pre-tax reduction in the allowance for credit losses and had strong equity gains. More importantly, charge-offs were low, net interest income stabilized and period-end loans grew for the first time since first quarter 2020. Expenses continued to decline as we made progress on our efficiency initiatives, and we increased our capital return to shareholders by repurchasing $5.3 billion of common stock and increasing our dividend.”

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