7 Reasons Not to Worry This Week

Will it be Christmas during the last week in July?

This has generally been a good month for equities, but it's not perfect. I singled out seven stocks over the weekend that are projected to post lower earnings this week than they did a year earlier. Thankfully, that's just one side of the story.

There's more good news than bad news on the earnings front. Between recessionary cost-cutting and general improvement from last year's depressed levels, several 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.

Source: Yahoo! Finance.

Clearing the table
Let's start at the top. Kodak is a company that could have easily buckled under as consumer trends worked against its flagship business. Digital cameras with flash-based memory cards have obliterated the market for Kodak's film products. Social networking, smaller photo-sharing sites, and even digital picture frames have no doubt left a dent in Kodak's photofinishing business. Moving into hardware and health care imaging is helping, but Kodak is still not entirely out of the picturesque woods. It has posted a loss in six of the past nine quarters. Wednesday's report should be more of the same, though the reason that Kodak is worthy of including in this week's column is that the deficit will narrow.

Green Mountain has revolutionized the coffee industry with its Keurig single-cup coffee brewing system and the K-Cups that fuel the caffeinated kicks. The stock's premium valuation has attracted critics, but the company's growth has been blazing. Green Mountain smoked through the recession, as the convenience and value of home-based java at a fraction of the cost of its coffeehouse counterpart have won out.

Visa is the ubiquitous credit card giant. Swiping plastic isn't going away, and as a marketer Visa gets to enjoy the transactional fruits while the issuing banks have to cope with the defaults. This doesn't mean Visa is an all-weather winner. Tightening credit standards may mean fewer cards to go around. When discretionary income dries up, so do the impulsive swipes. However, the pros think that quarterly profits will clock in 39% higher this week.

China Security & Surveillance is a Shenzhen-based provider of electronic surveillance equipment and other security gear. The stock has one of the highest bulls-to-bears ratios on Motley Fool CAPS, and it's easy to see why, given the stock's attractive valuation. China Security is trading for just shy of five times this year's earnings, even though it's growing its top and bottom lines at a double-digit rate.

CME is the company behind the Chicago Mercantile Exchange. The futures trading exchange naturally marches to a different beat than stock-based platforms. CME's daily volume averaged 12.2 million contracts last month, 8% ahead of where it was a year earlier.

IMAX is about to answer the question of if there's life after Avatar. The leader in premium theatrical experiences had a record first quarter on the strength of James Cameron's blockbuster, but are audiences still willing to pay more from super-sized flicks? Analysts seem to think so, pegging IMAX's net income to more than triple to $0.18 a share come Thursday's report.

Finally, we have Chevron on Friday. Integrated petroleum companies have been making headlines for all of the wrong reasons since April's oil spill in the gulf, but Chevron continues to fuel its own bottom-line revival. Wall Street is banking on a profit of $2.45 a share out of Chevron, well ahead of the $0.87 a share it rang up at the pump a year ago.

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 investors can rest easy. The bad news here 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.

Which of the many earnings reports due out this week are you looking forward to? Share your enthusiasm in the comment box below.

Green Mountain Coffee Roasters and IMAX are Motley Fool Rule Breakers choices. Chevron is a Motley Fool Income Investor selection. Try any of our Foolish newsletters today, free for 30 days. It will give you one less reason to worry about this week.