Don't let those Thanksgiving leftovers go down the wrong way.
I realize that many of you may be out scoring doorbuster deals this morning or still trying to make sense of yesterday's overload of NFL games.
Your mind may be elsewhere. Unfortunately, you should probably be paying attention to the market. We may be several quarters removed from the recession, but not all companies are bouncing back.
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
Royal Bank of Canada
Source: Thomson Reuters.
Clearing the table
Several companies will post lower earnings next week, but these are just a few of the names that really jump out at me.
Let's start with Del Monte, the food giant that goes beyond its signature produce items. The supermarket staple producer also cranks out Contadina pastas, Gravy Train dog food, and Meow Mix chow for cats. We all have to eat, and we all love our pets. However, the pros see a slight dip in profitability and revenue this time.
Shanda Interactive has been one of China's dot-com darlings for years, and the success of its online gaming initiatives led it to spin out its Shanda Games appendage. Sadly, things aren't going well for parent and offshoot.
Shanda's shortcomings don't mean that China's gaming niche is in trouble. Investors just need to be more selective. Shanda is the last of the five companies with major skin in the online gaming realm to report on the three months that ended in September, and a few of its rivals have stepped up with respectable bottom-line growth.
Novell's report may seem irrelevant to some. Didn't the networking pioneer just agree to be taken out at $6.10 a pop? Who cares if it unleashes demons from the underworld or strikes oil in the parking lot at headquarters? Well, investors can't stop paying attention. Deals come undone. Prices get renegotiated. Bidding wars emerge. Novell's fiscal performance can steer this scenario one way or the other. Analysts see a drop in quarterly profitability, and that may help explain why Novell had to settle for such a cheap exit strategy.
Collective Brands is always a surprising name to see on this list. It's the parent company of Payless Shoe Source, the small box hub for discounted footwear. Who doesn't like to pay less for shoes, especially in an iffy economy?
It's not just a problem at Payless, though. Big Lots -- the larger-box retailer that loads up on closeouts and overstocks -- isn't getting it done on the bottom line, too. An optimist can argue that retailers are doing so well that there isn't as much distressed inventory making its way to Big Lots at ridiculous price points. I'm not so sure about that.
Finally, we have Royal Bank of Canada coming up short. Investors are probably used to banks clocking in all over the map, but Royal Bank's projected shortfall in earnings is still noteworthy. Several of its Canadian banking peers will also be reporting next week, and many are expected to post higher net income than they did a year earlier.
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.
Editor's note: A previous version of this story used earnings data that failed to take Trina Solar's 2-for-1 stock split into account. The Fool regrets the error.
Shanda Interactive is a Motley Fool Rule Breakers choice. 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.