7 Reasons to Worry About Next Week

Heat has been a prevailing theme in the news this week. Between scorching temperatures in the Northeast and LeBron James' finally deciding last night to play for the Miami Heat, even the market has been quite the scorcher.

Yes, the Dow is once again at five digits. So far, the S&P 500 has risen every day in this abridged trading week.

Everything's red hot, so why do I get a chill when looking over some of the companies reporting earnings next week?

Let's go over a few of the blue chips and seemingly recession-proof companies where analysts see the arrows pointing down on the bottom line next week. Some of the names may surprise you.

Source: Yahoo! Finance.
EPS = earnings per share.

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

Let's start with Citigroup and Bank of America. Both stocks have bounced back nicely off of their market lows when financial stocks were reeling. They were two of the six notorious Dow components to fall to the single digits during last year's darkest stretch. Citigroup is still there, but its shares have popped fourfold since it briefly dipped below the $1 mark during March of last year.

Unfortunately for both of the banking giants, analysts see lower earnings next week. This may not shock Bank of America shareholders. It has posted lower year-over-year earnings in all but one of the past 11 quarters. Citigroup, on the other hand, had mustered bottom-line improvement in each of the five previous quarters. Either way, they're both likely heading in the same direction next week -- and it's not the right direction.

Rockwell Collins and Shaw rely on government contracts for a good chunk of their business, and it's easy to see why times are tough as the country tries to reel in its spending. If there's a silver lining to both of these reports, it's that analysts see only marginal slips from where the two companies were a year ago.

Texas Industries -- not to be confused with the semiconductor giant that also bears the Lone Star state's name in its moniker -- is in the cement business. It's naturally at the mercy of new construction. Last I checked, we had a glut of residential and commercial real estate. There are some shovel-ready infrastructure plays to be had at the moment, though.

Valmont makes lighting poles and other support structures. Many will argue that earning $1.08 a share in its latest quarter -- as the pros believe will happen next Wednesday -- is a good thing. Unfortunately, it's a far cry from the $1.69 a share that Valmont rang up during the same quarter a year ago.

Finally, we have Knoll. Selling office furniture may be a booming business during an economic recovery, but Corporate America apparently hasn't built up the appetite for Knoll's office systems, task chairs, and file cabinets just yet.

Why the long face, short-seller?
These reports aren't likely to be pretty, but there's still room for glimmers of optimism within the pessimism.

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

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

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