There's something wrong with the NFL -- and I promise I'll tie it to the stock market.
This week, the league handed down several fines to defenders who generated helmet-to-helmet hits that resulted in concussions. In an embarrassing twist, it was then discovered that the league was profiting from those same "illegal" hits through an outside vendor selling snapshots of the head-on collisions through the NFL's own website.
There's a gray area between hypocrisy and irony, and the same can be said about the past few weeks of rallying stock prices.
Yes, it's been a good run since early September, but there are still plenty of stocks out there with fundamentals that continue to deteriorate.
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.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
Source: Thomson Reuters. 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 Amgen. This was one of the first biotechs to break into the Big Pharma landscape with its Neupogen and Epogen drugs. Now it's suffering with the same bottom-line meandering plaguing many of the giant drugmakers.
Amgen usually finds a way to grow. If the pros are on target, this will be only the third time that Amgen fails to post year-over-year earnings growth over the past five years.
Akamai is a surprising name on this list. It's the leading content-delivery network, utilizing its massive fleet of servers to deliver fast and secure website pages, multimedia streams, and software updates. This remains a growing business, but margins are the daggers. Cutthroat pricing has created a dicey pricing environment. Net income doesn't stand a chance to grow in that kind of contested shade.
Kodak is probably not a surprising name to see here. When's the last time you bought a roll of Kodak film or had a set of prints developed? Digital cameras and social-network sharing have turned scrapbooking into a paperless art. Kodak is thankfully about more than just servicing the fading base of traditional shutterbugs, but the company's losses are still pegged to problematically widen next week.
Merck is a more conventional pharmaceuticals bellwether than Amgen, but it's also going the wrong way on the net income line. The stock's chunky 4% yield may be enough to keep income investors happy, but there's no such thing as a sustainable dividend if profitability continues to deteriorate.
Sprint Nextel is letting the two larger wireless carriers duke it out with attack ads. In the meantime, Sprint is trying to milk its so-so 4G network before its rivals catch up. It's not easy getting the market excited when you're serving up red ink, and no one appreciates widening deficits. Sprint Nextel hasn't generated a profitable quarter in nearly three years, and Wall Street isn't betting on that streak to end with Wednesday's report.
VisionChina Media runs a video-based advertising company in China. It knows how to reach a captive audience, with a network of monitors on crowded bus, train, and subway routes broadcasting its sponsored messages. The Chinese economy is booming, so it's surprising to see VisionChina likely to reverse last year's quarterly profit with a loss this time around.
Finally we have iRobot. From Roombas that vacuum floors on their own to military robots that can go on surveillance missions or detonate roadside bombs in the Middle East without placing soldiers in harm's way, iRobot really knows how to clean things up on several different levels. Unfortunately, the one thing it can't do is clean up its income statement. It's a pity, since iRobot was off to a smoking start this year after a couple of years of rudderless performances. It's time to reprogram iRobot into an earnings growth story.
Why the long face, short-seller?
These reports aren't likely to be pretty, but there's still room for glimmers of optimism.
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. Please take our Motley Poll then scroll down to discuss your opinion in the comments section.
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 wonders if 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.