Don't let investors down in November, Mr. Market.
Last Friday, I singled out seven bellwethers that analysts see posting lower quarterly profits this week, but the outlook isn't all bleak. Several companies are actually growing in this dicey climate.
Since I played up the pessimism over the weekend, let me come right back with a dash of optimism. Here are seven companies that analysts see posting healthier bottom lines this week.
|
Company
|
Latest Quarter EPS
(Estimated)
|
Year-Ago Quarter EPS
|
|
MasterCard (NYSE: MA)
|
$2.94
|
$2.47
|
|
Whole Foods Market (Nasdaq: WFMI)
|
$0.18
|
$0.01
|
|
Blue Nile (Nasdaq: NILE)
|
$0.16
|
$0.15
|
|
Crocs (Nasdaq: CROX)
|
($0.08)
|
($0.53)
|
|
IMAX (Nasdaq: IMAX)
|
$0.01
|
($0.05)
|
|
Starbucks (Nasdaq: SBUX)
|
$0.21
|
$0.10
|
|
Sirius XM Radio (Nasdaq: SIRI)
|
($0.02)
|
($0.07)
|
Source: Yahoo! Finance.
Clearing the table
Let's start at the top. MasterCard has breezed past the financial-services meltdown, since it simply markets its credit cards and collects transaction fees. The issuing banks are left on the hook for any defaults. However, aren't folks spending less? Aren't issuers being more selective about extending credit? Analysts still see MasterCard growing in this climate, and that's as refreshing as it is encouraging.
Organic grocer Whole Foods shouldn't be thriving in this environment. There is certainly some truth behind the "Whole Paycheck" joke, given the chain's premium pricing for superior foodstuffs. I was skeptical of the stock's valuation this summer, but I'm more than willing to chow down on some farm-raised, hormone-free crow. If the dramatic earnings improvement is real, Whole Foods has turned the corner.
Blue Nile -- an online jeweler that specializes in diamond engagement rings -- is another surprising name on this list. Aren't folks postponing matrimony until the clouds clear? Can big-ticket items be hot when the economy is still cool to the touch? Analysts see only marginal year-over-year improvement at Blue Nile, but it's still refreshingly unexpected.
Crocs is next. The shoes with holes? Really? When a fashion trend becomes a faded fad, it's not supposed to come back. However, Crocs continues to spruce up its product line and expand abroad. Projections call for Crocs to post a substantially narrower deficit than it did a year ago. It's not a turnaround, necessarily, but it's nevertheless a welcome sight.
When movie screens fade to black, it's the end of the show. But the fun is only beginning at IMAX, now that its income statement is back in the black. The exhibitor behind the gargantuan screens and beefed-up projection systems posted its first quarterly profit in three years over the summer. Analysts see a repeat performance. Why not? IMAX is growing its chain through ambitious joint ventures with multiplex operators, and movie houses have held up well as escapist fare during the recession.
Starbucks is another name that may surprise some. The company seemed to be in disarray recently. Shuttering stores, tweaking prices, and scrapping menu items seemed to be symptomatic of a major retreat. However, the pros now see the baron of baristas more than doubling its net income for the current quarter.
Finally, we have Sirius XM. The satellite radio operator may have had a rough 2009 in terms of net subscriber growth, but it has been able to shrewdly cut costs. Its cash-flow improvement should ring up nicely Thursday, with the pros expecting a smaller loss.
Cross those fingers, but know the fundamentals
These aren't the only companies expected to post year-over-year gains this week. Several companies have either found ways to grow during the recession or have simply cut enough corners to show improvement on the bottom line.
This doesn't mean that investors can rest easy. The bad news is that these companies are expected to post improving results. The optimism is already baked into their share prices. It makes it easier for them to slip, but why begin worrying about the companies that we aren't supposed to be worrying about?
If analysts are doing a good job modeling their profit targets, we'll be just fine.
Some other reads to get you through the week:
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