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by Mitchell Clark, B.Comm.

Some earnings reports are coming in now and a lot of them are pretty decent. At the very least, many are beating consensus and/or previous outlooks for upcoming quarters. This is all recognizing, of course, that earnings are managed and that a lot of corporations purposely downplay their expectations for the future, so it makes it easier to outperform when results are due. Still, this is the way the system works and the market trades off these relative expectations.

From the numbers that I'm reading so far, the outlook for fourth-quarter earnings season is looking pretty good. There have been a few misses so far, but mostly in regards to guidance for future quarters.

The Container Store Group, Inc. (NYSE:TCS) was one of the market's misses in that it reported adjusted earnings per share that beat its comparable quarter by over 37.5%, with a seven percent gain in sales to $188.3 million. Its 2014 full-year sales were forecast to be $754.0 million, just slightly below previous guidance of $756.2 million, and the position sold off. TCS has been one of the stock market's hottest IPOs of late and it's still a decent growth story. The shares doubled in the stock's market debut back in November. Price volatility is inherent in IPOs; they are almost always overpriced to begin with.

But a lot of companies have so far beaten consensus and increased previous guidance for 2014. Solid earnings results have come from Frisch's Restaurants, Inc. (NYSEMKT:FRS), The Greenbrier Companies, Inc. (NYSE:GBX), Constellation Brands, Inc. (NYSE:STZ), Monsanto Company (NYSE:MON), Team Inc. (NYSE:TISI), UniFirst Corporation (NYSE:UNF)…and the list goes on.

UniFirst has been an exceptional old economy wealth creator. Based in Wilmington, MA, the company supplies uniforms, work wear, and floor-care and restroom services. It's a "boring" but really good business. The stock lept five percent after reporting its quarterly earnings last week. It's currently at a record high of around $110.00 a share. This time two years ago, the stock was trading around $60.00.

The Greenbrier Companies is a noteworthy company. This old economy business manufactures railroad freight car equipment here and in Europe. The company also makes ocean-going marine barges-and business is good. (See How to Play the Bakken Oil Boom While Oil & Gas Companies Are at Their Highs.)

For the quarter ended November 30, 2013, total sales were $490.0 million compared to $415.0 million. Earnings attributable to the company were $15.4 million compared to $10.4 million, or $0.49 per diluted share, compared to $0.35 per diluted share. The company's latest quarter beat consensus on revenues and earnings; management reaffirmed its fiscal 2014 earnings per share guidance.

Currently, there is certainty regarding short-term interest rates and Fed tapering. With this backdrop, the most meaningful market-moving numbers are what corporations have to say about their businesses in terms of earnings and their near-term outlooks. With the corporate reporting so far, fourth-quarter earnings season is well positioned to surprise to the upside. But the marketplace seems less inclined to reward outperformance, even though there is still plenty of liquidity.

A stock market sell-off on solid corporate earnings fits market dynamics right now.

Disclosure: No positions

Source: Strong Corporate Earnings Worthy Of A Sell-Off?