Thanksgiving is a week away, but some companies are more grateful than others. In fact, despite months of rallying equities and the occasional glimmer of positive economic news, there are several companies that haven't earned their stock gains.
Looking over the handful of companies daring to report quarterly results in a holiday-shortened trading week, many of the widely followed stocks are projected to announce lower net income than they rang up a year ago.
Let's go over a few of the companies that have a quarterly date with Mr. Market that investors may come to regret.
|
Company
|
Latest Quarter EPS (Est.)
|
Year-Ago Quarter EPS
|
|
Atwood Oceanic (NYSE: ATW )
|
$0.69
|
$1.16
|
|
LDK Solar (NYSE: LDK )
|
($0.10)
|
$0.77
|
|
China Finance Online (Nasdaq: JRJC )
|
($0.06)
|
$0.21
|
|
Deere (NYSE: DE )
|
$0.03
|
$0.81
|
|
Brocade (Nasdaq: BRCD )
|
$0.13
|
$0.20
|
|
TiVo (Nasdaq: TIVO )
|
($0.06)
|
$0.98
|
|
51job (Nasdaq: JOBS )
|
$0.10
|
$0.15
|
Source: Yahoo! Finance.
Clearing the table
There will likely be many more companies posting lower earnings next week, but these are just a few of the names that really jump out at me.
Atwood Oceanics is an offshore driller. Have you pumped gas lately? Oil prices have been creeping higher since hitting springtime lows, as worldwide demand and a general uptick in the global economy are making Jed Clampett smile. It's not going to help Atwood's fleet of drilling units, as analysts see earnings clocking in 41% lower than last year.
LDK Solar has been a wild ride on the ups and downs of solar energy. Few will argue against the promising future of clean energy solutions, led by sun-powered initiatives. That's tomorrow, though. Wall Street is bracing itself for a small deficit this time around.
China Finance Online and 51job are Chinese companies that should be doing well these days. China Finance Online runs a pair of popular stock research websites. 51job puts out a weekly listing of job openings in roughly two dozen regional editions. Chinese stocks have been performing well this year, and the economic boom in China is creating plenty of new job opportunities. Yet both companies are pegged to take backward steps next week.
Deere is the agricultural equipment giant. With emerging markets bouncing back, the global demand for food should be an alley-oop pass to farming enablers like the company that John Deere started in 1837. It's not showing up in the numbers yet, though.
Networking specialist Brocade is another company that the pros see going the wrong way on the income statement. Large U.S. companies may be scaling back on IT spending, but several countries are seeing their economies bounce back quicker than we are.
Finally we have TiVo, slated to post its biggest loss in nearly two years. At a time when many consumer companies with their crosshairs on the couch potato are thriving, TiVo is having a hard time growing its subscriber base.
Why the long face, short seller?
Bummed? Well, maybe we should call off the pity party. Wall Street already expects these companies to deliver shrinking bottom lines, so one can argue that the bad news is already baked into the shares.
There may still be more than a few favorable surprises in the mix. Really. Let's take a look at how Atwood Oceanics has performed relative to analyst targets over the past year.
|
Month
|
EPS
|
Estimate
|
Difference
|
|
Sep. 2008
|
$1.13
|
$1.16
|
3%
|
|
Dec. 2008
|
$1.15
|
$1.22
|
6%
|
|
March 2009
|
$0.79
|
$0.88
|
11%
|
|
Jun. 2009
|
$0.81
|
$1.05
|
30%
|
Source: Yahoo! Finance.
Take a look at the final column. Do you see the positive trend? Atwood Oceanics has beaten market expectations in each of the four previous quarters, and the gap between its reality and Wall Street's perception continues to widen. That's great momentum to carry into next week.
The more I think about it, the less worried I become.
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