7 Reasons to Worry About Next Week

We have a holiday-shortened trading week coming up, and it's going to be a blue Christmas for more companies than you might think.

The economy may be showing signs of life, but try telling that to some of the publicly traded heavyweights posting their quarterly earnings next week. Despite several months of rallying share prices, several companies are still behind where they were a year ago.

Let's go over a few of the blue chips and seemingly recession-proof companies for which analysts see the arrows pointing down on the bottom line next week. Some of the names may surprise you.

Company	Latest Quarter's EPS (Estimated)	Year-Ago Quarter's EPS
Jabil Circuit (NYSE: JBL  )	$0.29	$0.30
Cintas (Nasdaq: CTAS  )	$0.43	$0.47
Commercial Metals (NYSE: CMC  )	($0.03)	$0.49
Lindsay (NYSE: LNN  )	$0.24	$0.51
Progress Software (Nasdaq: PRGS  )	$0.55	$0.58
Red Hat (NYSE: RHT  )	$0.16	$0.24
TIBCO Software (Nasdaq: TIBX  )	$0.20	$0.23

Source: Yahoo! Finance.

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

Let's start with Jabil. "Based upon our current expectations, it appears as though the worst of the recession is behind us," CEO Tim Main told investors during its most recent quarterly report.

Well, the worst isn't entirely behind the circuit-board maker. Jabil is expected to post slightly lower earnings on Monday afternoon.

Cintas is a surprising name on the list. Sure, it's not easy to move workforce uniforms and office supplies when companies are scaling back. However, Cintas has also been a consistent grower in the past. It delivered 39 consecutive years of revenue and earnings growth through fiscal 2008. That streak ended in fiscal 2009, and fiscal 2010 isn't looking any better.

Commercial Metals is a manufacturer and recycler of steel and metal products. "Any volume improvement in the quarter was seasonal and not reflective of any stimulus effect," the company's CEO remarked over the summer. "Destocking appears to be in its last stages; however, end-use demand remains weak." That was two quarters ago, but analysts continue to see pain on the company's bottom line.

Lindsay should be rocking these days. The maker of farmland-irrigation systems is toiling away in a global marketplace that's evolving and hungry. Yet Wall Street believes that Lindsay will earn roughly half as much as it did a year ago.

Progress Software is an enterprise-software company, specializing in application-infrastructure solutions. It posted year-over-year gains on the bottom line during every single quarter in fiscal 2007 and 2008. Fiscal 2009 has been a disaster, with earnings slipping in each of the first three quarters. The pros expect a repeat performance to close out the year on Tuesday.

Red Hat has been a tech darling, providing Linux-flavored enterprise-software solutions to companies saving serious money over traditional solutions. The company held up well during the early phases of the recession, but next week should mark its third consecutive quarter of year-over-year net income declines.

Finally, we have TIBCO Software, the "Power of Now" enterprise-software company. Well, the power of now is debatable, since the pros see profits slipping slightly in its latest quarter.

Why the long face, short seller?
These reports probably won't be pretty. Many of these stocks are market darlings in seemingly healthy sectors, to boot. A Linux play that's pulling its brimmed hat low? A circuit-board giant that's slipping, even as demand for handsets and routers booms? This won't be an attractive quarter, no matter how shiny and clean that Cintas uniform seems coming off the delivery truck.

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, leaving the door open for unexpected surprises.

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