Plagued by recession and financial uncertainties? Not the top IT
companies. These businesses withstood this century’s most devastating
financial meltdown and continue to soar.
So, who are these top performing corporations? What made them succeed
in trying times? What are their secrets? This article will examine some
of the top IT organizations that have beaten every estimate made by
economists, financial analysts and investment analysts.
And no, we’re not going to talk about the usual suspects like Apple,
Google and Microsoft. They’re a given when it comes to discussing tech
companies that did well despite all odds and you probably know their
secret: lots of moolah to spend, innovation and being unwilling to sit
on their laurels.
So, who are these intriguing IT companies that have been silently beating Wall Street?
1. Workday (www.workday.com)
Workday is an enterprise software company that deals with financial
management and HR solutions. It was founded by former PeopleSoft chief
strategist Aneel Bhusri in 2005.
Although it reported a loss of 15 cents per share in the first
quarter ending April 30, 2013, its financials are strong. Revenues for
the period were up 61%
compared to the year ago results. Analysts on Wall Street have
predicted a loss of 18 cents per share and underestimated revenues by $5
million.
It is difficult to ignore a company that has improving revenues and
income. But the difference with Workday is that it has consistently been
raking in good news. From the time it debuted, its stock has been
steadily rising. They earned a place on the 2013 Midas List from Forbes, making it second only to Facebook.
And it would seem that the company is poised to rise even further.
Brian Deagon at Investor’s Business Daily reported that the company is
steadily getting customers who are moving away from both SAP and Oracle.
Deagon also quoted Canaccord Genuity analyst Richard Davis as saying
that the company is expected to beat Wall Street expectations quarter
after quarter.
2. Cognizant Technology Solutions Corporation (www.cognizant.com)
Cognizant, which is a direct competitor of WiPro, Accenture, IBM,
Infosys and Tata Consultancy, have consistently been beating Wall Street
and analyst estimates.
For the fourth quarter ending December 31, 2012, the company had a modestly bigger net income at 92 cents per share, as opposed to analyst forecasts of 90 cents per share. This was because of increasing demand in Europe.
In the previous quarter, the company reported an EPS of 91 cents per share on total revenues of $1.89 billion. This is way above expectations of EPS at 87 cents per share on revenues of only $1.88 billion.
For the most recent quarter, the company continued that trend. At
face value, the company would tell you that its success is hinged on
strong demand, and a better pricing model than their competitors’.
3. Teradata (www.teradata.com)
Teradata has routinely been beating analyst estimates quarter after
quarter. They continued this trend with the results they got from the
first quarter of 2013 when they reported earnings of 60 cents per share,
beating estimates by 4 cents. They also reported higher than expected
revenues of $613 million, beating expectations by around $25 million.
What’s more, the company has experienced double-digit revenue growth in
recent quarters.
It certainly helps that the company is into markets that are
experiencing high growth: big data analytics, data warehousing and
market management. But what drives much of Teradata’s success are its
strong relationships with vendors such as Cisco. It has also been
aggressively expanding into other markets and has introduced new
products.
4. LinkedIn (www.linkedin.com)
LinkedIn has always been touted as an also-ran (mostly by those
outside of B2B). The professional social networking site has always been
the dark horse when compared to a 1 billion user-strong Facebook.
LinkedIn went public in 2011. Sure it created ripples, but only because
the IPO helped break the freeze on tech stocks.
Facebook, on the other hand, was wildly anticipated years before it actually went public.
But look at where Facebook and LinkedIn are now. The former has
become the textbook case when it comes to failed IPOs, while the later
has become the prime example of companies that have defied Wall Street
expectations repeatedly.
In the first quarter of 2013, LinkedIn posted Non-GAAP earnings of around $324.7 million, and analysts forecast a revenue of just about $317 million.
The result also beat out the company’s own expectation of earning only $305 million to $310 million in the said time period.
In December 2012, LinkedIn reported earnings of $11.5 million, a 66% increase from the previous corresponding period.
All in all, LinkedIn has stumped Wall Street forecasts for eight straight quarters.
The reason for its success?
LinkedIn never intended to be a Facebook clone. This segmentation and
differentiation allowed it to have its own identity. Sure, Facebook is
the #1 and the biggest social networking site, but LinkedIn is a
professional social networking site.
LinkedIn focused on this aspect to create its branding and build its
credibility. Now, as Facebook struggles to monetize the site with
advertisements, LinkedIn has taken a totally new approach: enterprise
software.
The company now sells software that helps companies recruit new
employees on the site. It also has premium subscriptions and marketing
solutions. In short, it does not really rely on advertising to keep
itself alive. Instead, they have leveraged their strong branding and
used that to create multiple income streams.
5. 3D Systems (www.3dsystems.com)
For the first quarter of 2013, 3D Systems reported a 31% increase
in revenue year on year and earned 21 cents per share. It slightly beat
the market with the top line while analysts were spot on about its
profit.
The previous quarter, analysts missed by a penny when the company
reported EPS of 19 cents per share on revenues of $101.6 million.
Nevertheless, 3D Systems is a must watch because it is one of the pioneers in 3D printing. 3D printing is a growing area in tech and is expected to expand at a rapid pace, making it into a $5.2 billion industry by the year 2020.
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These five IT companies ignored the recession and are pulling in
impressive results – that beat the street, quarter after quarter and
year after year. They’re not only tough and remarkable, they’re model
organizations that all start-ups should emulate.
Apple, Google and Microsoft – innovate or look out!