Between quantitative easing and the notion that market-friendly politicians were voted into power on Tuesday, it's no surprise that the major market indices are hitting fresh 52-week highs.

There's a fly in the ointment, and it's in the form of companies that shouldn't be flying at all.

Despite the heady market gains in recent weeks, there are still plenty of companies posting lower earnings than they did a year ago. Let's go over a few of the names that are expected to go the wrong way on the bottom line next week.


Latest Quarter's EPS (Estimated)

Year-Ago Quarter's EPS

Dean Foods (NYSE: DF)



GeoEye (Nasdaq: GEOY)



PDL BioPharma (Nasdaq: PDLI)



Rosetta Stone (NYSE: RST)



Xinyuan Real Estate (NYSE: XIN)






SunPower (Nasdaq: SPWRA)



Source: Thomson Reuters.

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

Dean Foods is a dairy giant. Selling milk and other dairy staples may seem like a stable model, but the sharp decline in profitability tells a different story. Shares of Dean Foods are only trading at a fifth of their five-year highs.

GeoEye operates a seemingly thriving satellite photo-snapping business. From popular mapping websites to energy companies looking for oil reserves, GeoEye's high-resolution photographs from space are clearly in demand. The government is also a major customer, given the power of surveillance information that GeoEye's digital photos can deliver to the military. Sadly, bottom-line growth just isn't happening this time.

PDL BioPharma is a profitable biotech with an emphasis on antibodies, but don't get too comfortable with even the $0.25 a share that the pros are targeting. You have to go back a year to find the last time that PDL beat Wall Street's earnings estimate.

PDL attracts income investors given its generous payout policy. It has paid out $0.50 a share in special semiannual dividends for two years, giving it a mind-boggling yield of 18% -- and that doesn't even include the extra payout of $1.67 shareholders received in December 2009. However, this will also likely be the fourth consecutive quarter that finds PDL earning less than it did a year earlier. The chunky distributions can't continue if the ability to pay them continues to diminish.

Rosetta Stone has been teaching its investors colorful swear words in exotic languages. The company behind the comprehensive language-learning software was a hot IPO two years ago, but it crumbled a year later when it had to scrap a secondary offering as it dramatically hosed down its near-term outlook. The shares have clawed their way back, but the market's expecting Rosetta Stone's first quarterly loss as a public company next Wednesday.

Xinyuan Real Estate is another company that has seen better days. Being a real estate developer in China sounded like a slam dunk two years ago, but then it seemed as if you couldn't discuss China's residential housing scene without including the word "bubble" in there. The sector has definitely lost some of its sizzle, though Xinyuan still has its share of believers -- especially at the ridiculously cheap valuation being sported at the moment.

NVIDIA makes video graphics cards. There may very well be some NVIDIA action in your computer, especially if you're a PC-based gamer. The company burned investors this summer when it talked down its top-line guidance -- and now the bottom line is going the wrong way.

Finally we have SunPower. Solar energy has been a good place to be lately, with many of the companies behind solar cell panels booming. SunPower isn't on that list. The pros see quarterly profits falling a sharp 69% when SunPower reports on Thursday.  

Why the long face, short seller?
These seven companies have -- literally-seen better days. The market has rewarded many of these stocks with reasonable gains over the past year, but they still haven't earned those upticks.

The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.

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

GeoEye is a Motley Fool Rule Breakers recommendation. NVIDIA and Rosetta Stone are Motley Fool Stock Advisor choices. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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.