7 Reasons to Worry About Next Week

The National Bureau of Economic Research reported this week that the recession -- the longest since the Great Depression -- ended in June.

Last June.

I don't know about you, but I haven't been feeling the whiffs of prosperity over the past 15 months.

It's not just me, since there are still plenty of companies unable to post better earnings than they did a year ago. Let's go over a few of the names that aren't getting the job done on the bottom line.

Company	Latest Quarter's EPS (estimated)	Year-Ago Quarter's EPS
AZZ (NYSE: AZZ  )	$0.71	$0.89
CRA Int'l (Nasdaq: CRAI  )	$0.30	$0.31
DemandTec (Nasdaq: DMAN  )	($0.01)	$0.02
Paychex (Nasdaq: PAYX  )	$0.34	$0.34
Sealy (NYSE: ZZ  )	$0.05	$0.05
Walgreen (NYSE: WAG  )	$0.44	$0.44
Accenture (NYSE: ACN  )	$0.63	$0.63

Source: Thomson Reuters.

Clearing the table
Let's start with AZZ. The electrical equipment maker reported a sharp drop in revenue and profitability three months ago. The bottom line took a big hit, even if investors back out expenses related to its recent acquisition of North American Galvanizing & Coatings. The upside at the time was that AZZ raised its guidance, but it doesn't appear to be enough to get earnings moving in the right direction next week.

CRA, short for Charles River Associates, is a corporate consultant. It has been doing a few things right, buying back stock and broadening its areas of consulting specialization. The share repurchases may prove vital heading into its quarterly report, since buying back shares can beef up profitability on a per-share basis.

DemandTec's enterprise software solutions model consumer behavior to beef up sales for retailers and consumer products manufacturers. Unfortunately, it can't practice what it preaches, as the pros see revenue clocking in slightly lower. It gets even worse after that, with analysts expecting last year's quarterly profit to reverse into a small deficit.

Paychex is the payroll giant. It has been able to grow its dividend at a healthy rate, but it needs to grow its earnings and free cash flow to keep that going. Given Paychex's recent performance, those payouts may not be sustainable. Obviously, you're going to be smarting as a company processing paychecks when the unemployment rate remains stubbornly high, so it shouldn't be a surprise to find the pros expecting flat earnings growth.

Sealy makes mattresses. At one time, this seemed like a recession-resistant business. No one wants to sleep on a lumpy mattress. However, this all probably changed when air-chambered Sleep Number beds and form-fitting mattresses grew in popularity. The pronounced recession has also taken its toll. After all, who can sleep when they're looking for work -- no matter how comfortable their mattress might be.

Walgreen is the popular drugstore chain. This is another of the seemingly all-weather realms. Folks always need to have prescriptions filled at the corner pharmacy. Snacks and household essentials aren't going to be as cyclical as diamond jewelry and fresh caviar. Unfortunately, Walgreen is calling in sick with what appears to be a flat quarter. The silver lining here is that Walgreen posted a dip in profitability three months ago, so matching last year's net income is a relative victory.

Finally, we have Accenture, the consulting company that had the crummy misfortune of having built an entire marketing campaign around Tiger Woods just before his credibility-killing scandal broke. Accenture was the first corporate sponsor to drop Woods, but it's not as if was doing so well before that point. Accenture has posted year-over-year declines in profitability in five of the past six quarters.

Why the long face, short-seller?
These seven companies have literally seen better days. The market has rewarded many of these stocks with healthy gains over the past year, but they still haven't earned those upticks.

The good news here is that Wall Street already expects these companies to deliver shrinking or flat bottom lines. In other words, the bad news is already baked into the shares.

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