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7 Reasons to Worry About Next Week

By Rick Munarriz – Updated Apr 6, 2017 at 12:19AM

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Watch your step on the way down the next seven days.

The economic news looks good this morning. The unemployment rate dipped for the first time in more than a year. The country lost fewer jobs than it has since last summer.

Feeling cheery? Not so fast.

See, I'm still waiting for companies to begin posting improving results. I'm not getting that from a lot of once-dependable players. Many of our beloved bellwethers are still expected to post lower earnings year over year.

Let's go over a few of the blue chips and seemingly recession-proof companies with dismal analyst outlooks for next week. Some of the names may surprise you.

Company

Latest Quarter EPS (Estimated)

Year-Ago Quarter EPS

DISH Network (NASDAQ:DISH)

$0.67

$0.73

SYSCO (NYSE:SYY)

$0.49

$0.55

VisionChina Media (NASDAQ:VISN)

$0.10

$0.12

JA Solar (NASDAQ:JASO)

($0.06)

$0.14

Rick's Cabaret (NASDAQ:RICK)

$0.19

$0.21

Sara Lee (NYSE:SLE)

$0.24

$0.28

Clear Channel Outdoor (NYSE:CCO)

$0.01

$0.23

Source: Yahoo! Finance.

Clearing the table
Several companies will post lower earnings next week, but these are just a few of the names that really jump out at me.

I thought the country's recession was turning us all into coach potatoes. Thus, DISH Network should be thriving in this market, especially given its value positioning as the cheaper alternative in satellite television. Instead, DISH has been losing subscribers. It's only logical to expect earnings to head lower.

SYSCO is one of the ultimate "all-weather" stocks. One of the world's largest food-service companies, SYSCO stocks hospitals, schools, prisons, and even restaurants with the food we eat. SYSCO is so steady that it has increased its dividend annually for more than 30 years. Could that streak end if earnings keep heading in the wrong direction?

VisionChina Media is an advertising company … but in China, which makes a big difference. It serves up video marketing through the busy mass transportation system of the world's most populous nation. That seems like an ideal market in a country holding up far better than the rest of the planet, but analysts still see profitability shrinking.

JA Solar isn't a surprising name on the list. Solar panels have become less buzzworthy as cheaper energy forms regain prominence. When even a leader such as JA Solar posts losses, things are looking dark indeed for solar power.

Rick's Cabaret runs a popular chain of strip clubs. Even if you consider adult entertainment taboo to your portfolio, it's hard to fathom havens of titillation faltering in a recession. Unfortunately, Rick's bottom line is apparently getting as skimpy as some of its dancers' outfits. 

Sara Lee is a supermarket staple. Beyond its namesake treats, Sara Lee also puts out Ball Park hot dogs, Jimmy Dean sausages, and Kiwi shoe polish. Investors have historically flocked to brand giants as safe havens, but they're not recession-proof. Shoppers are turning to cheaper store brands, refuting any notion that nobody doesn't like Sara Lee.

Finally, we have Clear Channel Outdoor. No one expects a billboard company to hold up well during an economic lull. Advertisers aren't spending as much as they used to. Commuters aren't on the road as much. However, Wall Street sees a particularly huge drop in profits from the company, leaving it just barely in the black.

Why the long face, short seller?
I didn't mean to alarm you. I'm just a realist. Chinese growth stocks are buckling. Food giants are backtracking. You would probably be watching this on CNN, but you cancelled your DISH Network subscription last week, didn't you?

There is a silver lining, though. Investors are already braced for the worst with these reports. If there's an upside to this grim list, it's that lower profitability is already baked into next week's reports, which actually opens the door for unexpected surprises.

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

Some other reads to get you through the weekend:

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SYSCO is a Motley Fool Inside Value selection and a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services 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. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Stocks Mentioned

DISH Network Corporation Stock Quote
DISH Network Corporation
DISH
$14.27 (-6.12%) $0.93
Sysco Corporation Stock Quote
Sysco Corporation
SYY
$73.62 (-1.74%) $-1.30
Clear Channel Outdoor Holdings, Inc. Stock Quote
Clear Channel Outdoor Holdings, Inc.
CCO
$1.30 (-4.41%) $0.06
The Hillshire Brands Company Stock Quote
The Hillshire Brands Company
HSH.DL
RCI Hospitality Holdings, Inc. Stock Quote
RCI Hospitality Holdings, Inc.
RICK
$63.94 (1.48%) $0.93

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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