When the Dow briefly topped the 12,000 mark on Wednesday, it was just another round mile marker, not a confetti-triggering event. Those in the financial know don't take the 30-stock Dow Jones Industrial Average too seriously. The S&P 500 and Nasdaq are the gauges worth tracking.
However, this was the first time that the Dow had topped that particular threshhold in nearly three years. In short, we've come a long way.
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
Source: Thomson Reuters.
Clearing the table
There will likely be more companies posting lower earnings next week, but these are just a few of the names that really jump out at me.
Let's start with Boston Scientific. The manufacturer of pacemakers and other medical equipment will make its shareholders skip a beat next week -- which may not be a bad thing. Sure, analysts see Boston Scientific's profit falling to a mere dime per share, but momentum is on its side. Boston Scientific has earned twice as much as Wall Street projected in each of the two previous quarters.
Keeping it in the medical family, McKesson does everything from distribute prescriptions to arm health-care professionals with medical management software. Where the company stands on health-care reform is moot at this point. After posting year-over-year profit gains in 10 of the past 11 quarters, McKesson is eyeing a rare step back when it reports on Monday.
Corinthian Colleges and other post-secondary educators were riding high during the recession. The unemployed and the not-so-happily employed wanted a convenient and cost-effective way to beef up their job skills, and Corinthian provided the schooling. But the industry buckled last year when concerns over loan repayments forced the educators into tighter admission controls. Today, Corinthian's no longer at the head of the class.
Pfizer can't restore its net income to health. The pharmaceutical maker's pipeline is a concern, but even its current fleet of active treatments has to be troublesome if earnings are flagging.
Headwaters does some cool eco-things, like converting coal into liquid fuels or making building products out of recycled materials. Alas, there's no green in its income statement. Headwaters is likely to post a wider quarterly loss next week.
Blackboard is also flunking out. President Obama may have encouraged the country's youth to turn to education as a profession during this week's State of the Union address, but things aren't all crisp chalk and shiny apples there. Teachers are being laid off, and budget cuts are forcing schools to go easy on supplies. Blackboard's innovative classroom solutions would naturally be smarting in this climate.
Finally, Openwave's expected to reverse last year's modest profit with a small deficit. The company foolishly rejected a partial tender offer in 2007 that was roughly four times higher than where the stock finds itself today. If only it could go back in time.
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.
McKesson and Pfizer are Motley Fool Inside Value selections. Blackboard and McKesson are Motley Fool Stock Advisor picks. Blackboard is a Motley Fool Hidden Gems recommendation. 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 whether 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.