There's a problem with Mr. Market.

Despite giggling its way through more than four months of rallying equities, stock fundamentals haven't kept up their part of the bargain.

The market rallies have been refreshing, but the sad reality is that many important stocks have been clocking in with lower earnings this earnings season. That won't get any better in the near term.  

Let's go over a few of the blue-chip, seemingly recession-proof companies that may suffer drops on the bottom line next week. Some of the names may surprise you:


Latest Quarter EPS (Estimated)

Year-Ago Quarter EPS

Verizon (NYSE:VZ)



DreamWorks Animation (NYSE:DWA)



ConocoPhillips (NYSE:COP)



Moody's (NYSE:MCO)



Monster Worldwide (NYSE:MWW)






Disney (NYSE:DIS)



Source: Yahoo! Finance.

Clearing the table
There will likely be many more companies posting lower earnings next week, but these are a few of the names that really jump out at me.

Verizon is a dud if you judge by its fading landlines, but its joint venture Verizon Wireless definitely stands out from the competition. Verizon may not be offering up the iPhone or Pre -- for now -- but is that enough to send earnings in the wrong direction?

It's been a record year for movie exhibitors, and quality family entertainment is timeless. Unfortunately for DreamWorks Animation, DVD sales have nonetheless been sputtering. It also doesn't help that DreamWorks Animation is currently between its bread-and-butter Shrek releases.

ConocoPhillips is one of Warren Buffett's biggest mistakes, by his own admission. Buying in too early -- or too late -- cost his shareholders billions. Things aren't getting any better for the energy behemoth. Analysts see a steep drop in quarterly profits next week.

I'm scratching my head on Moody's. Aren't credit ratings more important now than ever? They are, but let's not coat the three major players -- Moody's, Standard & Poor's, and Fitch Ratings -- with Teflon. After all, some market critics hold the credit rating agencies at least somewhat culpable for completely failing to see the credit market meltdown coming.

Monster Worldwide is the company behind, one of the leading job-listings sites. With unemployment at a multidecade high, Web traffic must be hopping. But despite all those job seekers, Monster also needs plentiful job listings and active recruiting to fire on all cylinders.

LoopNet is the leading online marketplace for commercial real estate listings. This may seem like a dreadful area to specialize these days, but the glut of cheaper commercial properties may start bringing out the vultures.

Disney isn't immune to recessionary hardships, but it's in a compelling position to ride out the storm. Television advertising is a mess, but Disney has a steady trickle of cable subscriptions through ESPN, ABC Family, and Disney Channel. Disney's Pixar acquisition also yielded another winner, Up, during the quarter. Still, I guess there aren't enough screaming Jonas Brothers and Miley Cyrus fans to compensate for shrinking attendance at its theme parks and a sponsor slowdown at ABC.

Why the long face, short-seller?
These quarterly reports won't be pretty, but that's no shock to Mr. Market. We're talking about analyst estimates here, so the bad news has already been baked into the stock prices. The real surprise here would be healthy reports.

That could happen. It wouldn't take much of a positive surprise for some of the seven companies -- particularly Verizon -- to post year-over-year improvement next week. Disney in particular has typically beaten analyst expectations, making the House of Mouse fertile ground for another potential upward surprise.

The more I think about it, the less worried I become.

Some other reads to get you through the weekend:

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LoopNet is a Motley Fool Rule Breakers selection and a Motley Fool Hidden Gems recommendation. Walt Disney, DreamWorks Animation, and Moody's are Motley Fool Stock Advisor picks. Walt Disney and Moody's are Motley Fool Inside Value selections. Try any of our Foolish newsletters today, free for 30 days

Longtime Fool contributor Rick Munarriz wonders whether his contrarian heart will ever be happy. He does not own shares in any of the companies in this story, save for Disney and DreamWorks Animation. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool's disclosure policy wants to ride the Matterhorn.