A great story is essential for a successful initial public offering. From there, the key to building wealth lies in the numbers.

The most important thing about quarterly earnings isn’t whether or not they beat analyst expectations, or even if they’re rising or falling. Rather, it’s what they indicate about the health and growth of the underlying business.

Put another way, our task each quarter is to discern each company’s health and growth by determining what’s going on with their drivers of growth and the strength of the balance sheets that finance them. That’s what’s ultimately going to determine how dominant our Portfolio 2020 companies become, and how much wealth they’re going to build for us.

Here’s a brief look at what we know about our picks from the latest round of numbers. Starting with “Beyond Our Borders” recommendations reporting so far, BASF (GER: BAS, OTC: BASFY) came in with a 98 percent increase in income from operations before special items. Sales were up 26 percent with gains reported across all divisions and management succeeded in cutting costs company wide as well.

Demand surged particularly in the automotive and electronics sectors, with Asian and South American markets leading the way. The company sounded a cautionary note on the second quarter, however, citing continued weakness in Europe and scheduled plant shutdowns that will have a negative impact on sales.

If BASF has proven anything in the past couple years, it’s that company earnings and its share price are heavily impacted by economic ups and downs; yet its industry-leading position in key markets is not. That‘s why we hold it instead of its more cyclical and worse positioned rivals. And the company’s focus on innovation on the product and process sides of the business will only widen that gap in coming years. Buy BASF up to USD65.

BHP Billiton (NYSE: BHP) shares suffered this week from the new tax on mining in Australia. In reality, however, the boost in the effective tax rate from 43 to 57 percent will hurt the reputation of government Down Under a lot more than the global mining giant’s earnings, which remain robust and on an upward track.

The company’s fiscal third quarter numbers came in solidly at all divisions. Seasonal weakness—in part due to weather—crimped output of some resources such as copper. But manganese ore production rose 133 percent, as the company ran at full alloys capacity to meet robust demand from steelmakers, particularly in China.

BHP raised output iron ore–a key steel input–by 11 percent in late April and longer-term measures to expand production continued to progress, including the Rapid Growth Project 4. Output of lead, nickel, silver and zinc rose as well.

Strong reserves and output gains, coupled with rising resource prices as the global economy bounces back, are good reasons to expect further gains in shares. BHP Billiton is a buy below 78.

China Metal Recycling ((HK: 773) saw its net profit rise 62 percent, beating the expectations of most analysts as the company continued to build its China-wide metals recycling franchise. It’s enjoying better than expected sales of copper and solid steel volumes, thanks to a favorable combination of surging economic growth and rising prices for resources, which make the alternative of recycled competitors more attractive.

The move to expand into Tianjin with an acquisition in mid-April is the latest step in the company’s ongoing powerful expansion. Buy China Metal Recycling up to HK10 (USD1.30).

Freeport McMoRan (NYSE: FCX) CEO Richard Adkerson took a 72 percent pay cut in 2009. But the company he runs was considerably kinder to its investors finishing with a 228.5 percent return.

More important, despite a slow start digesting those gains in 2010, robust business results point the way to an even better showing this year. First quarter earnings came in at $2 per share, $2.11 excluding one-time charges, and the company doubled its dividend to an annual rate of $1.20 per share.

Strong pricing in copper, gold and molybdenum—a key element of reinforced steel—were a major factor and more than offset somewhat higher production costs and lower volumes produced of copper and gold.

Molybdenum output rose 70 percent excluding purchased metal, while the average price per pound rose 31 percent to $15.09. Efforts to spur growth in mining are on track, which should provide a favorable confluence with rising global demand in coming years as the world’s economies pick up the pace.

Geographic diversification is another key strength for this company, limiting the impact of resource nationalism on its overall portfolio. Its balance sheet is also well defended, and it was strengthened further by the retirement of $281 million in debt in the first quarter, substantially eliminating refinancing risk for the next years by taking total maturities down to just $110 million, or scarcely 6 percent of first quarter cash flow. Well off its mid-2008 high of 121, Freeport is a buy up to 85.

Itron (NSDQ: ITRI) posted very strong first quarter operating earnings of $1.01 per share, including 26 cents of tax benefits. Cash flow from operations and free cash flow—essentially cash flow less capital spending—surged to record levels.

Meanwhile, North American revenue hit a record $243 million while order backlog came in at $1.5 billion. Overall revenue was 29 percent higher, paced by the 74 percent gain in North America. That offset the negative impact of foreign exchange volatility on international sales.

Gross margin held steady at 32 percent, versus 33 percent a year ago, as the company held its costs steady despite the boost in output; and debt expense was cut as well.

The key once again was growing global interest in advanced metering applications, the basic building block of all Smart Grid systems as well as for improving efficiency of water and natural gas usage.

These initiatives continue to enjoy the full support of governments worldwide and the company remains at the vanguard of technological advancement, particularly as its “OpenWay” systems win orders (45 percent of Itron North America revenue in the first quarter).

If we have a problem with Itron, it’s the torrid gains rung up by the stock, particularly since early February. In fact, it’s now well beyond our target of 72 after gapping higher in the wake of the earnings news. We’d like to see Itron consolidate these recent gains before pushing our buy target higher–hold.

Insituform Technologies (NASDQ: INSU) posted a 71.9 percent boost in first quarter earnings, excluding certain one-time charges like acquisition-related expenses. Contract backlog rose 27.9 percent to a new record from year earlier tallies, and was up 7.3 percent from fourth quarter tallies.

Management also affirmed full-year guidance of $1.45 to $1.55 per share, as the company remained on track for strong full-year growth as well at its core sewer rehabilitation business, as well as in its energy and mining piping segments. Gross and operating profits at the sewer rehab division were up 14.2 and 29 percent, respectively, a clear sign of both demand for Insituform’s products and services and management’s success in making operations slimmer and more profitable.

The company is also beginning to see the benefit of stimulus spending in the US, as well as cost cutting in the European market where market conditions remain weak.

Asian operations growth was weaker than expected, due to some cost revisions in India. Operations in Hong Kong, Australia and Singapore remain on track, however, and the India operations appear to be getting back on track.

Unfortunately for the stock recently, even these numbers weren’t enough to measure up to what had become hyper-bullish expectations. As a result, the shares have slipped in recent weeks. That’s had the salutary effect, however, of pushing it back below our buy target for the first time since early March. Buy Insituform up to 25.

Kinder Morgan Energy Partners (NYSE: KMP) has resumed growth in its distribution as numerous projects have come on stream in recent months and the limited partnership has used its superior scale and financial resources to expand its asset base.

All operations performed up to snuff for the owner and operator of fee-based midstream energy assets, including the ethanol transport business that controls 30 percent of the fuel’s flow in North America.

The company continues to boost its interest in the Haynesville shale area, where energy production continues to explode. Turning to the numbers, distributable cash flow—the accounts from which dividends are paid—rose 36 percent from year earlier levels, and 22 percent before certain items.

Ethanol volumes in the company’s pipelines rose 41 percent, in part because of an increase in California’s mandate to boost the legal minimum percentage of the fuel in gasoline from 5.7 to 10 percent. That’s the kind of legally built-in growth Kinder features, and it’s a big reason why its distribution is a safe bet to keep rising at a robust pace in coming years, building wealth for patient investors. Buy Kinder up to 70.

Qualcomm (NSDQ: QCOM) raised its fiscal 2010 earnings guidance on better than expected results at its 3G device shipments, as 3G wireless users surpassed 1 billion worldwide for the first time.

Also, according to CEO Dr. Paul E. Jacobs, the company is “positioned to continue to grow share through new partner engagement and our broad industry-leading 3G chipset roadmap.” First quarter swung to operating income of $776 million, versus a loss in the recession-plagued first quarter of 2009. Earnings per share also swung to a gain of 46 cents per share, versus an 18 cents per share loss a year ago and were up sequentially from 50 cents in the fourth quarter of 2009.

Demonstrating the microscope big tech companies live under, Qualcomm shares actually took a vicious hit on the earnings news, as analysts fretted about its second quarter forecast of 40 to 44 cents a share, versus consensus estimates of 44 cents. Some worried about a greater portion of sales in “less developed areas of the world” hurting margins, as developed markets continued to slump and saturate.

Expect more of this kind of action in the future, given that some 39 analysts cover the stock. The good news, however, is the company is still both dominant and growing, and a beneficiary as the global economy comes back to life. Qualcomm is strong long-term buy up to 45.

Here are earnings announcement dates for the rest of the Portfolio 2020 holdings. Look for updates in my bi-weekly review articles. Also check our Twitter feeds for stock and sector news—and keep your eye on your inbox for any Alerts that may come down the pike.

Alstom (Paris: ALO, OTC: AOMFF)—May 4

China High Speed Transmission Eq. (HK: 658)—Sept 20

China Resource Power (HK: 836)—August 24

Electricite de France (Paris: EDF, OTC: ECIFF)—May 11

Hyflux Water Trust (OTC: HXWTF)—May 6

AeroVironment (NSDQ: AVAV)—June 23

American Superconductor (NSDQ: AMSC)—May 14

Qinetiq’s (London: QQ, OTC: QNTQY)—May 27

Starpharma ((OTC: SPHRY)—August 24

AES Corporation (NYSE: AES)—May 7

Hewlett-Packard Company (NYSE: HPQ)—May 18

Ormat Technologies (NYSE: ORA)—May 5

Vale (NYSE: VALE)—May 5