I was skeptical about the economy heading into the weekend, bringing up several companies that are projected to post lower quarterly earnings this week. However, there will be even more companies improving their bottom lines over the next few days.
Let's go over seven publicly traded companies that are expected to post year-over-year improvement on the bottom line this week.
Latest Quarter's EPS (Estimated)
Year-Ago Quarter's EPS
Chipotle Mexican Grill
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Apple. The tech darling's market-thumping success isn't really a secret anymore. Apple now commands the country's second-largest market cap, thanks to its arsenal of Macs, iPhones, iPods, and iPads. The Cupertino champ also has a long track record of landing well ahead of analyst expectations, so the $4.08 a share that the pros are targeting for tonight's earnings report will likely be more of a launching pad than a landing spot.
VMware went public just three years ago, but it's a well-known name in corporate circles. VMware pioneered the virtualization software niche, allowing enterprises to reconfigure their hardware to create more powerful and effective solutions. VMware wasn't immune to the recessionary slowdown or an influx of competitors. Earnings sank for a couple of quarters last year. However, VMware is back on track these days.
Intuitive Surgical makes the da Vinci system, which is revolutionizing a growing number of surgical procedures. Despite investors' concerns that health-care reform would sandbag the company's chances, or that cash-strapped hospitals wouldn't latch on to Intuitive's robotic surgical arms, the da Vinci's efficiencies -- in everything from surgeon fatigue to patient recovery times to operating room optimization -- can't be ignored.
Thanks to those memorable E*TRADE Baby ads, mainstream audiences are fully aware of the edgy discount broker. The company online banking division flew too close to the sun by originating risky mortgages, but E*TRADE has paid the price, and it's now ready to move forward. Three months ago, E*TRADE surprised Wall Street with its first quarterly profit in three years. The market's banking on a repeat performance. Either way, its showing will all but certainly improve on the $0.66-a-share deficit it posted a year ago -- which, after a 1-for-10 reverse stock split, now amounts to a $6.60-a-share hole.
Chipotle is a beast. Its comps held up during the recession, and now the burrito roller is facing a kinder climate for its "food with integrity." The Mickey D's spin-off has typically smoked past analyst expectations, so Thursday's report should be another spicy one.
What can brown do for you? United Parcel Service will let us know later this week. UPS is a fair proxy for the economy in general, since an uptick in activity is a decent indicator on the state of transactional activity. If the pros are right, this should be a great quarter, with UPS earnings soaring 60% to $0.88 a share.
Finally, we have Altria lighting up. The company behind the stateside distribution of Marlboro cigarettes and other tobacco products is kicking ash, apparently. Altria has attracted income investors with its chunky yield, but that cash payout seemed to represent a last gasp before liability litigation and the gradual fade of cancer sticks did the company in. Instead, earnings are still growing at Altria. Never underestimate the power of a company that sells addictive products.
Cross those fingers, but know the fundamentals
Investors in these seven stocks have a right to be excited. All of these companies are improving their financial situations, and they've all earned the gains that the market rally has bestowed upon them over the past year. The market's expectations for them may be high, but these seven stocks wouldn't have it any other way.
Are you buying or selling stocks these days? Share your strategy in the comment box below.
Chipotle Mexican Grill, Intuitive Surgical, and VMware are Motley Fool Rule Breakers picks. Apple is a Motley Fool Stock Advisor selection. Chipotle Mexican Grill is a Motley Fool Hidden Gems recommendation. United Parcel Service is a Motley Fool Income Investor choice. The Fool owns shares of Altria Group, Apple, Chipotle Mexican Grill, and United Parcel Service. Try any of our Foolish newsletter services free for 30 days.
True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.
Longtime Fool contributor Rick Munarriz prefers to look at the bright side of life -- and strife. 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.