It happens to every company sooner or later: Wall Street sets a mark for quarterly earnings, and the company misses that goal. Sometimes an earnings stumble is a signal to sell, but digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down. Today, in order from least to most comprehensible, we're looking at superparamagnetic iron oxide nanoparticles, telecommunications engineering services, and steaks. Let's dig in!

Superparafragilistic ... huh?
If you've never heard of our first sandbagger today, it's probably because it operates in a field nobody but the insiders knows much about. But Advanced Magnetics (NASDAQ:AMAG) might be worth knowing, despite the recent disappointment. The maker of advanced contrast agents for MRI scans reported a net loss of $0.78 per share, worse than last year's $0.36 loss per share, and far below analyst expectations of a slimmer $0.53-per-share loss. Share dilution of 21% over last year didn't help, but neither did an increase in expenses from $4.2 million to $10.2 million.

And of course, revenues are slim and unpredictable. Advanced Magnetics' established product portfolio doesn't have the oomph it once did, and the company hasn't seen $1 million of quarterly revenue since 2004. Yet the share price has more than quadrupled from its 52-week low, thanks to a string of promising progress reports on its phase 3 trials of an intravenous iron replacement therapy for patients with severe kidney disease.

Development efforts on that drug, known as Ferumtoxyl, provided most of the cost increase for this quarter, and the company is expected to file for FDA approval in the second half of 2007. The board of directors got a major overhaul in September, and the company moved from the American Stock Exchange to the much more liquid Nasdaq in June. Current results don't look great, but Ferumtoxyl could change that in a hurry, with current competition from just one drug. But do your homework before rolling the dice, as it will take some growing to fill the shoes outlined by a $600 million market cap.

Options? What options?
Let's move on to Dycom Industries (NYSE:DY) a specialty contractor with a focus on telecommunications installations and services. Where Wall Street had been looking for a net profit of $0.25 per share, the company came up just short with a $0.24 EPS report. That's one penny above the year-ago take, mostly thanks to a generous 14.4% reduction in its share count. On a dollar-to-dollar basis, income fell 11% to $9.6 million.

The main culprit in this saga is interest expenses. Last year, that line item accounted for an $842,000 charge, which grew to $3.8 million this time around. Operating income, which doesn't include interest and taxes, grew by 11.3% on 6.6% higher revenues. So from an operational point of view, things look OK, but there's a heavy debt load to pull.

Sprinkling salt on those wounds in Dycom's accounting department, the company also found problems in its past option grants. There was no evidence of illegal backdating activity or fraud, but the review did find instances of missing or delayed paperwork. The impact on released results is said to be "immaterial," but the company did provide a restated balance sheet for the previous quarter with a $2.2 million charge for these findings.

Add in guidance below expectations, and you get a more than 10% price drop on this earnings release. As long as Verizon (NYSE:VZ) and company continue to chase Comcast (NASDAQ:CMCSA) and the other cable operators by rolling out miles upon miles of fiber optics, companies like Dycom should have plenty of work orders to fill. The debt load behind its increased interest expenses comes from a pair of acquisitions over the past year, including one that closed during the just-completed quarter. As these additions are incorporated into Dycom's operations, increased revenues should follow and earnings growth shouldn't be far behind. There might even be enough of it to handle all those interest payments ...

Dinner's on me!
We'll settle down at Japanese steakhouse operator Benihana (NASDAQ:BNHNA) (NASDAQ:BNHN) to close this tour. The teppanyaki specialist was supposed to have $0.24 of earnings per share to show for its quarter, but came up a penny short. Revenues increased 8% to $58.9 million, with 9.8% same-store growth.

That $0.23 per share was in line with the company's official guidance, though, so chalk this one up to overly optimistic analysts. On the other hand, Benihana could've and should've done better. Results were held back by longer-than-expected remodeling closures of two restaurants, plus an unexpected closure in Miami Beach due to a kitchen fire. Management is baking while the oven is hot, turning that closure into another remodeling project rather than waiting for its scheduled 2008 makeover.

Renovations cost Benihana about $8 million this quarter, or $0.05 per share after tax, so on a purely operational basis, I'd say the company is doing just fine. Granted, it's not growing as fast as Buffalo Wild Wings (NASDAQ:BWLD), but Benihana is more of an upscale concept than the winged bovine, and it's growing more on a regional level than on a national scale at this point. The stock price dropped more than 11% last week, and it's up to you to decide whether this is a stale dish or a tasty buy-in proposition. It is a five-star stock in the Motley Fool CAPS community. Appetizer shrimp, anyone?

The aftermath
Some of these underperformers are victims of larger circumstances, while others might have only themselves to blame. It's up to you to decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which really are stuck in the mud. Come back next Monday, and we'll take a look at another batch of mishaps and disappointments. It'll be fun and educational. Promise.

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Seeking great deals on unfairly punished stocks? Philip Durell and his merry band of Fools at the Motley Fool Inside Value newsletter service are standing by to help you find great stocks at ridiculously low markdowns. Try a 30-day trial subscription to see whether bargain-hunting is right for you. Buffalo Wild Wings is a Hidden Gems selection.

Fool contributor Anders Bylund holds no position in any of the companies discussed this week, though he's suffering from a longstanding teppanyaki addiction. That shrimp sauce is evil -- but oh, so good. The Fool has a disclosure policy , and you can see his current holdings for yourself.