5 Reasons Not to Worry This Week

It's not a perfect world out there for investors, but things may be starting to get better.

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

Majesco (NASDAQ: COOL  )

$0.02

($0.07)

eBay (NASDAQ: EBAY  )

$0.69

$0.60

Citigroup (NYSE: C  )

$0.96

$0.31

Fastenal (NASDAQ: FAST  )

$0.33

$0.30

General Electric (NYSE: GE  )

$0.43

$0.39

Source: Thomson Reuters.

Clearing the table
Let's start at the top with Majesco Entertainment. The video game industry has been slammed lately, and smallish publisher Majesco has taken it on the chin. The company behind the Cooking Mama video games and the Zumba Fitness workout titles has seen its stock shed nearly two-thirds of its value since peaking 10 months ago.

Most of the software companies are struggling. Industry tracker NPD Group has been posting bleak trends for three years, claiming last week that software sales through traditional retailers in December were 26% below the prior year's showing.

Analysts see Majesco posting a small profit this afternoon, overcoming a deficit a year earlier, but stay close. Majesco has actually missed Wall Street's profit forecasts in each of the past four quarters. The trend isn't comforting on any front, but let's see what Majesco can do on what Wall Street sees as a slight dip in revenue generation.

eBay is the company behind the namesake online marketplace, but let's not ignore PayPal. The world's leading financial platform is growing faster than eBay, and has more active registered users these days. It may be just a matter of time before eBay changes its name to reflect its speedier appendage, though both businesses have been showing signs of life lately.

Unlike Majesco, the trend at eBay relative to Wall Street forecasts is positive. Instead of coming up short in each of its past four quarters, eBay has landed just ahead of analyst profit targets every single time. This bodes well heading into Wednesday's report, where those same pros see profitability inching 15% higher.

Citigroup also reports this week. Everyone's keeping a close eye on the bankers, and not just because they played a major part in slamming the economy into a recession a few years ago.

Citi is one of the many "too big to fail" banks that are starting to bounce back. However, the pros have been cooling on its earnings potential. Two months ago, Wall Street was banking on a profit of $1.05 a share out of Citi. That consensus average slipped to $1.04 a share last month, $0.99 a share last week, and we're down to $0.96 now.

Either way, it would be a shock to see Citi not build on its earlier report. Citigroup rang up just $0.31 a share in net income during the prior year's fourth quarter.

Fastenal makes fasteners for the industrial and construction industries. This may not be a very glitzy niche, but it's good enough to serve up reasonable growth. Wall Street sees Fastenal's revenue and net income climbing 9% and 10%, respectively, when it chimes in on Thursday.

Finally, we have General Electric stepping up with fresh financials on Friday morning. The pros see the conglomerate cranking out a quarterly profit of $0.43 a share, just ahead of the $0.39 a share that it posted 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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Related Tickers

7/22/2014 4:00 PM
C $49.60 Up +0.25 +0.51%
Citigroup Inc CAPS Rating: ***
COOL $1.81 Down -0.03 -1.63%
Majesco Entertainm… CAPS Rating: **
EBAY $52.05 Up +0.35 +0.68%
eBay CAPS Rating: ****
FAST $44.93 Down -0.07 -0.16%
Fastenal Company CAPS Rating: ****
GE $26.02 Up +0.04 +0.15%
General Electric C… CAPS Rating: ****

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