If you've been wondering what became of this weekly column over the past two weeks, we've simply had too few companies posting lower year-over-year results.
Don't pop the champagne cork just yet, bulls. There's been a general lack of companies reporting in general, but that will change now that we're diving headfirst into earnings season.
There are still plenty of companies posting lower earnings than they did a year ago. Let's go over a few of the names that are expected to go the wrong way on the bottom line next week.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|PetMed Express (Nasdaq: PETS )||$0.24||$0.32||Add|
|Advanced Micro Devices (NYSE: AMD )||$0.08||$0.11||Add|
|AT&T (NYSE: T )||$0.60||$0.61||Add|
|Verizon (NYSE: VZ )||$0.55||$0.58||Add|
|SanDisk (Nasdaq: SNDK )||$0.99||$1.08||Add|
|Western Digital (NYSE: WDC )||$0.65||$1.23||Add|
|US Airways (NYSE: LCC )||$0.67||$1.34||Add|
Source: Thomson Reuters.
Clearing the table
Among the many companies likely posting lower earnings next week, but these are just a few of the names that really jump out at me.
A chunky 4.2% dividend hasn't spared PetMed Express from trading near its 52-week low. How did the direct marketer of pet medications by phone and online become such a dog? For starters, the company has missed Wall Street's profit targets in three of the past four quarters. In other words, even the $0.24 a share that the pedigreed pros expect this time around may be too ambitious.
Advanced Micro Devices may seem to be the distant silver medalist in terms of microprocessor market share, but at least AMD is profitable these days. Unfortunately, it's not as profitable as it was a year ago.
Happily for AMD, the PC isn't exactly dead. Worldwide shipments of computers and laptops did slip during this year's first quarter -- the first year-over-year decline since the end of the recession -- but bounced back with a year-over-year gain this past quarter. Stateside shipments are still down, but we do live in a great big world.
AT&T and Verizon represent the country's two largest wireless carriers. They're the only two networks officially carrying the iPhone. Things just have to be rosy for them, right? Well, not if they're on this list.
AT&T apologists can point to the company's fading landline business, but its U-verse broadband television service has been wooing penny-pinching couch potatoes. Verizon has less to fall back on, and it remains to be seen whether last week's decision to stop selling new unlimited data plans will help or hurt its bottom line.
SanDisk and Western Digital store data. SanDisk leads the market for solid-state flash memory products, while Western Digital specializes in more traditional hard drives. It's easy to see where Western Digital is coming up short, given the shift to smaller computing gadgetry, but shouldn't SanDisk be holding up nicely? Lord knows how many SanDisk SD memory cards I have lying around my house.
Finally, we have US Airways. Don't let the popularity of extra fees or recent airfare hikes kid you into thinking that legacy carriers are flying through smooth skies these days. Pesky fuel prices have been eating into profits. US Airways is earning roughly half as much as it did a year ago, but the news could always be worse. American Airlines' parent company AMR will likely post a dramatically wider quarterly deficit the day before US Airways reports.
Why the long face, short-seller?
These seven companies have seen better days. The market has rewarded many of these stocks with reasonable 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 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.