7 Reasons Not to Worry This Week

How was your weekend? If you caught my column on Friday, in which I singled out seven bellwethers that analysts see posting lower quarterly profits this week, I may have made you nervous.

Sorry about that. Whaddya say I cheer you up?

After all, investors shouldn't be braced for bad news out of every company that's stepping up to the earnings stage this week. Several companies -- including some that you may very well own a piece of -- are projected to actually grow their bottom lines this week.

Once again, I have a table and I'm not afraid to set it.

Source: Yahoo! Finance.

Clearing the table
Let's start at the top with a company that spent last year at the bottom. Legg Mason runs some of the funds that were among last year's worst performers. When you find your fund family's name on the list of dogs, cash outflows compound the problem of lower asset bases. However, the pros see the company earning $0.22 a share, reversing a similar loss a year earlier.

AMD may be a distant second in the computer chips market, but it's a spunky silver medalist. Analysts expect a smaller deficit at AMD, and those guesstimates came before the gold medalist blew the market away last week.

Hudson City Bancorp is different from most large banks. It raised its dividend in April. It also refused to panhandle for TARP money during the circus of outstretched hands. Why should it surprise anyone to see a bank that's actually doing things the responsible way -- and growing at a time when many of its peers are buckling?

The pharmaceutical industry is seen as a defensive sector. Good times or bad, prescriptions need to be filled. It's refreshing to see Eli Lilly growing.

Starbucks is probably a shocking name to see. Isn't this the disgraced java heavy that's closing down stores, laying off baristas, and bracing investors for a year of negative comps? Is there anything more ego-deflating than its experiment to strip its name from a few of its Seattle stores, in favor of generic community names? What do you do when your brand becomes a liability? Well -- on the bottom line, at least -- analysts think that Starbucks is turning the corner.

McDonald's, on the other hand, isn't a surprising company to see here. The dollar menu alone would be a margin killer, but the leading fast-food chain has the smarts to offset single-buck burgers with big-ticket items such as salads, chicken-breast sandwiches, and iced coffee drinks. That strategy has net income heading in the right direction.

Finally, we have Netflix. With 10.3 million subscribers, the DVD-rental service is having no problem proving its worth to a country of couch potatoes. It's one of the few subscriber-based leisure services growing well in this climate.

Cross those fingers, but know the fundamentals
There's going to be a flurry of earnings reports this week, so naturally you're going to have a few standouts. Some of the names on this list, including Legg Mason and Starbucks, may be surprises, especially given the brutal quarter that the economy just went through.

Moreover, a recovery may not be all that far away if AMD is bleeding less and banks with credibility are taking steps forward.

If I have to wave a warning flag, it's that these seven stocks have more pressure on them than the seven sinkers I singled out on Friday. These are the companies that are expected to post improving results. The optimism is already baked into their share prices, so it's easier for them to slip. But why begin worrying about the companies that we aren't supposed to be worrying about?

If the analysts know what they're doing, we'll be just fine.

Some other reads to get you through the week:

• 3 Reasons to Be Scared of These Stocks
• I Can Make You Rich in 3 Years
• The Perfect Investments for This Market