With economic flux in Greece, Dubai, Portugal, and just about any country on the Risk playing board, financial calamity seems to betray buoyant global share prices.
I certainly didn't make things any better on Friday, singling out seven stocks that are projected to post lower year-over-year earnings this week.
Thankfully, there's actually more good news than bad on the earnings front. Between recessionary cost-cutting and general improvement from last year's depressed levels, many companies are in better shape now than they were a year ago.
Let's go over seven companies that analysts see posting healthier bottom lines this week:
|
Company
|
Latest Quarter EPS (Estimated)
|
Year-Ago Quarter EPS
|
|
Research In Motion (Nasdaq: RIMM )
|
$1.28
|
$0.90
|
|
LDK Solar (NYSE: LDK )
|
$0.12
|
($1.25)
|
|
CarMax (NYSE: KMX )
|
$0.25
|
$0.17
|
|
SAIC (NYSE: SAI )
|
$0.32
|
$0.30
|
|
A-Power (Nasdaq: APWR )
|
$0.41
|
$0.30
|
|
Lindsay (NYSE: LNN )
|
$0.33
|
$0.01
|
|
Micron Technology (Nasdaq: MU )
|
$0.23
|
($0.82)
|
Source: Yahoo! Finance.
Clearing the table
Research In Motion makes BlackBerry smartphones. While the iPhone and smaller Android-powered devices generate a lot of buzz these days, RIM still manages to move millions of BlackBerry phones on a quarterly basis. The company retains a firm grasp on the corporate market, thanks to its phones' email- and texting-friendly physical keyboards.
True to its name, LDK Solar is one of the many public companies trying to cash in on energy from the sun. The maker of multicrystalline solar wafers has been a volatile performer in an equally turbulent industry, but investors cheered earlier this month when the company raised its near-term guidance.
CarMax has carved out a living by making used-car retailing a respectable endeavor. Its haggle-free showrooms and rigorous trade-in tune-ups have helped set it apart from smaller lemon-peddlers. Last summer's Cash for Clunkers campaign may have briefly encouraged new car purchases, but CarMax is apparently doing just fine these days.
SAIC is a military contractor. Last year's fears that the new administration would stifle defense spending have rightfully subsided. As of its previous quarter, SAIC's order backlog totaled a whopping $16.6 billion.
A-Power is also generating growth. The alternative-energy conglomerate hit the market with a dilutive private placement two months ago, priced at a bitter 15% discount to where it traded at the time. However, analysts consider any potential dilution when cranking out their estimates, and they still expect A-Power to grow earnings per share at a healthy 37% clip.
Lindsay is an irrigation specialist in the agricultural space. The company made my "7 Reasons to Worry" column three months ago, when the pros figured that it would earn roughly half as much as it did a year earlier. But beefier gross margins helped Lindsay actually grow on the bottom line, despite a hefty top-line hit. Mr. Market seems to think that the improvement will continue as we head into Wednesday's report.
Finally, memory- and image-chip giant Micron Technology is a cyclical beast, and now it's time to feast. Wall Street is targeting net income of $0.23 a share, after Micron lost a meaty $0.82 a share. With last year's margin-crushing price war on memory chips now firmly behind them, Micron and its rivals are in a great position to cash in on global demand.
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 simply cut enough corners to show improvement on the bottom line.
This doesn't mean that investors can rest easy. The bad news here is that these companies are expected to post improving results, so any optimism is already baked into their share prices. That 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.
Which of the many earnings report due out this week are you looking forward to? Share your enthusiasm in the comment box below.
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