Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



4 Reasons to Worry About Next Week

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The economy is showing signs of fumbling the recovery.

Jobless claims may have dipped for the first time this week since April, but that's just one bright spot.

Spain's credit rating was talked down and the rest of the global economy is still teetering.

It's not just iffy news at the macro level. There are more than a few companies that aren't pulling their own weight in this supposed economic recovery.

There are still plenty of names posting lower earnings than they did a year ago. Let's go over a few of the companies that are expected to go the wrong way on the bottom line next week.


Latest-Quarter EPS (Estimated)

Year-Ago Quarter EPS

My Watchlist

Majesco Entertainment (Nasdaq: COOL  ) $0.08 $0.13 Add
Finisar (Nasdaq: FNSR  ) $0.21 $0.33 Add
Korn/Ferry (NYSE: KFY  ) $0.27 $0.39 Add
Smithfield Foods (NYSE: SFD  ) $0.54 $0.85 Add

Source: Thomson Reuters.                         

Clearing the table
Let's start at the top with Majesco Entertainment.

The video game developer has had some surprising hits over the years. Who would imagine that the culinary Cooking Mama would take off as a handheld gaming sensation? In a sea of workout titles, it was hard to picture Majesco coming on strong with its Zumba Fitness titles, much less selling a whopping 7 million copies of the fitness franchise. However, gravity has caught up to the big boys of gaming. Why should Majesco be spared?

The good news for Majesco is that Wall Street does see it growing its revenue and earnings by 12% and 9% respectively for all of fiscal 2012. It's just not likely to go in that direction this particular quarter.

During the E3 powwow this week, the company showed off its upcoming NBA Baller Beats game. A rhythm game using a real basketball and Xbox's motion-based Kinect controller? Color me intrigued. The game hits stores in September.

Finisar was one of 2010's hottest stocks, but that was before optical networking took a tumble last year. This will likely be Finisar's fourth consecutive quarter of earning less than it did a year earlier.

Investors have been paying the price for Finisar's shortfalls. The same stock that peaked at $46 early last year has gone on to shed more than two-thirds of that value.

Korn/Ferry International is a staffing specialist. The problem here isn't just that analysts see the company earning less than it did a year earlier. Korn/Ferry has actually come up short against Wall Street's bottom-line targets in each of the two previous quarters. Is the third time the charm?

Finally, we have Smithfield Farms on the block. Analysts may see the world's largest pork processor and hog producer posting a sharp decline in profitability when it reports on Thursday morning, but optimists shouldn't give up hope. Smithfield has landed ahead of Wall Street's profit targets in each of the past six quarters.

Why the long face, short-seller?
These 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. Lower earnings translates into higher earnings multiples, and nobody wants to see that happen.

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.

If four reasons to worry aren't enough, let's make your future No.5. There's a single shocking truth about your retirement that you may not know. It's part of a free report that won't be around forever, so check it out now.

The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1907097, ~/Articles/ArticleHandler.aspx, 10/23/2016 4:42:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 3:52 PM
COOL $3.26 Up +0.02 +0.64%
Majesco Entertainm… CAPS Rating: **
FNSR $29.16 Down -0.52 -1.75%
Finisar CAPS Rating: ***
KFY $20.83 Up +0.18 +0.87%
Korn/Ferry Interna… CAPS Rating: *****
SFD.DL2 $0.00 Down +0.00 +0.00%
Smithfield Foods,… CAPS Rating: **