5 Reasons Not to Worry This Week

It's not a perfect world out there for investors.

Major market indexes may be near multiyear highs after another quarter of robust capital appreciation, but there are some problematic spots all over the world.

I recently went over some of the companies that are expected to post lower quarterly profits when they report this week.

Thankfully, they're the exceptions and not the rule. Let's go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.

Company

Latest Quarter EPS (estimated)

Year-Ago Quarter EPS

My

Watchlist

Team (NYSE: TISI  )

$0.39

$0.33

Add

Acuity Brands (NYSE: AYI  )

$0.92

$0.79

Add

Resources Connection (Nasdaq: RECN  )

$0.12

$0.06

Add

Xyratex (Nasdaq: XRTX  )

$0.44

$0.42

Add

Family Dollar (NYSE: FDO  )

$0.75

$0.66

Add

Source: Thomson Reuters.

Clearing the table
Let's start at the top with Team.

The provider of specialty industrial services is expected to post an 18% pop in profitability when it delivers its latest quarter results after today's market close.

Acuity Brands lights up the world with luminaires and lighting control systems. Acuity's brands include Peerless, Holophane, and Lithonia Lighting.

Wall Street sees Acuity earning $0.92 a share when it reports tomorrow, but the Street could use some of Acuity's illuminating products. Analysts have overestimated Acuity's profit potential in four of the past seven quarters.

Resources Connection provides accounting and other professional services through its Resources Global operating subsidiary. Serving 1,900 clients through 3,000 professionals of its own in 77 practice offices, the company's fate is tied to the ups and down of corporations. Thankfully, Wall Street sees net income doubling when Resources Connection posts its quarterly results tomorrow.

Xyratex is a data storage specialist with an impressive streak of blowing Wall Street's profit targets away over the past year. That's an important trend to keep in mind when it's time to report. The pros aren't holding out for too much improvement at Xyratex. They see the technology company earning $0.44 a share, barely above the $0.42 a share that it rang up a year earlier.

That may not seem like much, but it's at least better than 13% decline in revenue that Wall Street is targeting for the period.

Finally, we have Family Dollar reporting. The bargain-minded retailer operates more than 7,400 deep-discount stores across the country. It proved everyday low pricing was naturally a big winner when the economy turned lower a few years ago, but now the big question is if Family Dollar can continue to grow at a point in the economic growth cycle when shoppers may be more willing to trade up.

Things should be just fine for now. Analysts see Family Dollar earning $0.75 a share. The chain only mustered a profit of $0.66 a share a year earlier.

Cross those fingers, but know the fundamentals
Investors in these five stocks have a right to be excited. They are all improving their financial situations. They are worthy of the gains that the market rally has bestowed upon them over the past year.

I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings.

The expectations may be high, but these five stocks wouldn't have it any other way.

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Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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