5 Companies Upping Their Estimates

The S&P 500 has soared over 35% since bottoming out in early March. That may sound like a decent rally. But what still gives investors pause are the first-quarter performance numbers that came out during that run. Earnings underlying the S&P slipped a whopping 39% during that period. The idea that the market has gotten ahead of itself is one of the key reasons many market watchers expect stocks to pull back at some point later this year.

That said, there is actually some good news brewing as the second quarter comes to a close at the end of this month: A select few companies are actually revising their quarterly and annual performance projections upward. There are several ways to look at this mini-trend. It could signal that investors and businesses are finally starting to open their wallets once again. It could also show the early signs of a broader economic recovery. However, maybe it simply means companies are beating low expectations.

“Even when the economy’s really sick, there are some firms that can beat estimates because of good moves or good luck,” says Dan Seiver, a finance professor at San Diego State University. “I’d like to say these are the green shoots, but I don’t really think these count.”

Only time will tell if Seiver is right. Over the next few weeks companies will manage their second-quarter earnings reporting by pre-releasing performance numbers. It’s an easy way for them to match investor expectations with actual results and, hopefully, prevent the big increases and decreases in stock prices that occur when traders are caught off guard. These announcements will give investors an inside look at what's to come next month.

Until then, here are five companies that recently increased their forecasts — and some insights into why the revisions were necessary.