7 Reasons to Worry About Next Week

As exciting as it was to see the Dow poke its head back up over 10,000 yesterday, this morning's spike in the country's unemployment rate shows that we still have a way to go before we can call this an economic recovery.

If that isn't enough to make you cautious, have you checked out some of the companies that are projected to post lower quarterly profits than they did a year ago?

Let's go over a few of the blue chips and seemingly recession-proof companies for which analysts predict bottom-line declines next week. Some of the names may surprise you:

Company	Latest Quarter EPS (Estimated)	Year-Ago Quarter EPS
Disney (NYSE: DIS  )	$0.40	$0.43
Abercrombie & Fitch (NYSE: ANF  )	$0.21	$0.72
Macy's (NYSE: M  )	($0.10)	($0.08)
Applied Materials (Nasdaq: AMAT  )	$0.03	$0.18
Tyco International (NYSE: TYC  )	$0.54	$0.81
Fluor (NYSE: FLR  )	$0.90	$1.01
Weight Watchers (NYSE: WTW  )	$0.64	$0.67

Source: Yahoo! Finance.

Clearing the table
Several companies will post lower earnings next week; these are just a few of the names that really jump out at me.

Let's start with Disney. The family-entertainment giant is usually hopping during its summer quarter, with families trekking out to its theme parks or setting sail on its growing fleet of cruise ships. Disney also has the seemingly recession-resistant cable business, as folks tune in to ESPN, Disney Channel, and the ABC network. Alas, this is shaping up to be the fourth consecutive quarter in which Disney posts a year-over-year decline on the bottom line. Sorry, Mickey. 

Abercrombie & Fitch and Macy's appeal to entirely different mall demographics, but neither retailer apparently resonated with back-to-school shoppers this year. Abercrombie is pegged to post a substantially smaller profit than it did a year ago, whereas Macy's is staring at a slightly wider loss.

Applied Materials has its fingerprints all over the semiconductor, flat-panel, and solar industries. This cyclical company bears watching, because if it's not doing well, its wide array of customers won't be, either.

Tyco used to be called "mini GE," back when that was a compliment. Its interests in security and fire-protection systems may be all-weather endeavors, but Tyco also has enough skin in the industrial-products game to take it on the chin when the economy isn't humming along. Mr. Market sees Tyco earning a third less than it did a year ago.

Industrial builder Fluor has slowed lately. Losing a $2.1 billion oil refinery deal in Kuwait and a $580 million hydrocracker construction contract has turned bottom-line growth into marginal declines.

Finally, we have Weight Watchers. Pesky unemployment rates threaten to turn more of us into chip-munching couch potatoes. This may play right into the dieting specialist's master plan. It's not a coincidence that two of the most recent IPOs have been vitamin retailers, since folks do want to feel healthier. Unfortunately, Weight Watchers' bottom line is also losing a little weight.

Why the long face, short seller?
These reports aren't likely to be pretty. Many of these stocks are market darlings in seemingly healthy sectors, to boot. A family entertainment giant that even Miley Cyrus and the Jonas Brothers can't save? A diet system provider that isn't as fit as its customers want to be? This won't be an attractive quarter, no matter how spectacular this month's Macy's Thanksgiving Day Parade plays out.

There is a silver lining, though. Investors are already braced for the worst with these reports. If there is an upside to this grim list, it's that lower profitability is already baked into next week's reports, which actually opens the door for unexpected surprises.

The more I think about it, the less worried I become.