Earnings season is winding down, but we still have a lot of big names reporting this week.
On Friday, I pointed out seven bellwethers that analysts see posting lower quarterly profits this week, but don't let this past weekend's debut of 2012 get you into an Armageddon mindset. Plenty of companies are growing in this difficult climate.
I was a pessimist on Friday. Now it's my turn to be the optimist. Here are seven companies that analysts see posting healthier bottom lines this week.
|
Company |
Latest Quarter's EPS (Estimated) |
Year-Ago Quarter's EPS |
|---|---|---|
|
Canadian Solar (NASDAQ:CSIQ) |
$0.54 |
$0.31 |
|
NetEase.com (NASDAQ:NTES) |
$0.50 |
$0.36 |
|
salesforce.com (NYSE:CRM) |
$0.16 |
$0.08 |
|
Target (NYSE:TGT) |
$0.50 |
$0.49 |
|
Gap (NYSE:GPS) |
$0.44 |
$0.35 |
|
D.R. Horton (NYSE:DHI) |
($0.24) |
($2.53) |
|
J.M. Smucker (NYSE:SJM) |
$1.04 |
$1.02 |
Source: Yahoo! Finance.
Clearing the table
Let's start at the top. Canadian Solar is a player in China's hot solar-energy market. The sector has taken investors on a roller-coaster ride in recent years, as the push for clean energy bucks against the related costs. A few of Canadian Solar's peers are expected to post lower earnings this week, so good luck making sense of that mixed message.
NetEase.com is another Chinese play. The leader in online gaming has benefited from the country's leisure-seeking youth, and there's no doubt that NetEase's online fantasy games are huge. There can be hundreds of thousands of players during peak periods of play. Chinese regulators are cracking down on the niche, by restricting foreign ownership and tightening content standards before approving new titles. That obviously isn't a good thing, but for now, NetEase is still growing quickly.
salesforce.com delivers Web-based enterprise-software solutions. It offers probably one of the better examples of cloud computing, and it's able to offer a cheaper and more portable solution than traditional corporate applications can. "Cheaper" and "convenient" make for an easy sales pitch, so salesforce.com has grown even as many companies scale back on IT spending.
Target and Gap are popular retailers. Target, of course, is the "cheap chic" discount department store. Gap is the company that ruled the 1990s with its denim and khakis, but it has struggled at its Old Navy, Banana Republic, and namesake concepts in recent years. Well, they're both heading in the right direction now.
D.R. Horton is yet another homebuilder projected to post a narrower loss than it did a year ago. The industry isn't entirely back, but order cancellations have slowed. Sensing that residential real estate prices have bottomed out, folks are starting to close on their purchases.
Finally, we have J.M. Smucker. Now, before you assume that PB&J is a logical recessionary meal, keep in mind that many food makers have been posting lower earnings lately. Consumers are bypassing the premium brands at the grocery store and settling for cheaper store brands. Even if Smucker clocks in just ahead of last year's profitability, as analysts predict, it will be a sweet victory.
Cross those fingers, but know the fundamentals
These aren't the only companies expected to post year-over-year gains this week. Several companies have either found ways to grow during the recession or have simply cut enough corners to show improvement on the bottom line.
This doesn't mean investors can rest easy. The bad news is that these companies are expected to post improving results. Since the optimism is already baked into their share prices, they can have an easier time slipping. But why begin worrying about the companies that we aren't supposed to be worrying about?
If analysts are doing a good job modeling their profit targets, we'll be just fine.
Some other reads to get you through the week:
