First quarter earnings season is now in full swing. That means not a day will go by without investors getting bombarded with the latest financial report cards from companies around the world — or the endless chatter that accompanies them.

Larger companies are under constant pressure to hit the bar that Wall Street sets every three months. Coming up just a penny or two short on the bottom line can wipe out millions (and sometimes billions) of dollars in market capitalization in the blink of an eye, just as overshooting the mark can elicit cheers from the crowd. No wonder so many companies game the system by issuing lowball forecasts so they can under-promise and over-deliver.

That makes it even tougher for stock analysts to determine how those bars should be set. Take Apple (Nasdaq: AAPL) for instance. The company has routinely topped its quarterly earnings guidance by a wide +40% margin during the past several years. Yet when the company announced its first quarter results a few days ago, it “shocked” the market by posting a profit of $3.33 a share — shattering consensus expectations of $2.45 a share.

With all their channel checks and number crunching, the pros weren’t even in the ballpark — some barely in the same zip code. Views of where the company will finish the year are all over the board. One analyst has put pen to paper and come up with a conservative figure of $9.08 a share, while another is expecting it to earn no less than $13.00. Clearly, somebody’s best guesstimate is going to be way off the mark.

Not surprisingly, just a day or two after it became painfully obvious that Apple is being swamped by iPhone demand, more than a dozen analysts were quick to ratchet up their price targets. But upping your outlook after the company provides its latest bearing is no better than predicting last week’s weather. With apologies to Adam Sandler’s character in the Wedding Singer, that information would have been useful to me YESTERDAY!

Incidentally, I called readers’ attention to Apple’s momentum in the latest issue of Market Advisor, raising my price target on the stock to $269. That was done on April 15th — less than a week before it shot up to a new all-time high. In fact, we had bullish things to say as far back as last June, when the shares were still trading at $135.

I say this not to toot my own horn, or to discredit stock analysts (many are razor-sharp and make buckets of money for their firms), but to point out that my staff and I do things a bit different.

Like Warren Buffett, we don’t get too caught up in the quarterly earnings game. We’ve all seen one company post blockbuster growth and have Wall Street yawn, while another announces steep losses to a standing ovation. Expectations color our interpretation, just as a good movie can fall flat because it was over-hyped.

In the end, hitting or missing an arbitrary three-month target is of little consequence. My staff and I are perfectly happy to see a company sacrifice today if it will generate greater shareholder value tomorrow. We focus on competitive position, economic moats, returns on capital, industry growth drivers and future cash flow potential — not whether or not profits came in at $0.23 per share instead of $0.24 because of rainy spring weather.

Take video game developer Activision Blizzard (Nasdaq: ATVI). The stock has turned a $10,000 investment into nearly $80,000 during the past decade, however; some might be wondering whether last quarter’s meager profit of about two cents a share signals an end to the party.

But that’s the wrong question to ask.

The market share gains at 49 of the world’s top 50 game retailers be enough to offset soft overall demand industry-wide? The answers to these questions will shape earnings not just next quarter, but for years to come.

Most importantly, we demand that a portfolio candidate have powerful catalysts working in its favor. In Apple’s case, those catalysts are plainly visible — and 4G technology is right around the corner. Typically, though, the catalysts that get a stock in gear are tougher to find.

I like vodka maker Central European Distribution (Nasdaq: CEDC), for example, in part because of a crackdown against bootlegging in Russia. The regulatory change could help push the shares sharply forward during the next year. In the meantime, if the company happens to beat earnings expectations by a penny, well, my staff and I are just fine with that.