Because estimates of growth were unrealistic. Rapid growth temporarily cuts margins in most businesses enough to eat into profits. So failing to hit a high growth estimate might be the direct cause of beating on EPS.
Investors may well prefer the revenue growth to the current EPS (because in such situations, current revenue growth drives future earnings growth) so the stock price may not respond well to the EPS increase.
In a few cases, management intentionally sacrificed growth by raising prices, so the margin increase drove the under performance of revenue growth rather than vice versa. That can be a valid strategy if there are clear limits to the market size.
h/t jsf67
Views: