Investors are happy.
The S&P 500 hit levels last seen in June 2008. Consumer confidence is coming around. The Super Bowl wasn't a boring blowout, playing to its largest audience ever.
Unfortunately, it's not all roses and cheese heads.
The country's deficit grew by $50 billion last month. The situation in Egypt remains iffy.
Oh, and not every company is enjoying this economic turnaround.
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 STEC, the maker of high-end solid-state drives for the enterprise storage industry. This would seem to be a growing niche during the early stages of economic expansion, but it's not happening. Analysts see STEC's revenue declining by 15% in its latest quarter, with earnings falling even harder.
Winn-Dixie is the Southeastern supermarket chain that bills itself as "the beef people." Well, where's the beef? Investors cheered when the 484-unit chain emerged from bankruptcy in 2006, but now it's about to post its second consecutive quarterly loss.
Advance America is a leader in the controversial payday lending industry. Offering ultra-short-term loans at sky-high rates to folks living paycheck to paycheck is drawing intense scrutiny. The new Consumer Financial Protection Bureau can't cap those ridiculous rates on an annualized basis, but regulators can force greater transparency so subprime borrowers know the real price they're paying over time.
NVIDIA pioneered the graphics chip industry. It's catching the Tegra by the tail these days, with its chips powering some of the latest tablets, auto displays, and even smartphones. However, Wall Street still sees revenue and earnings slipping in its latest quarter. It gets worse: Analysts see even larger year-over-year declines for the current quarter.
BioMarin Pharmaceutical is a biotech with a compelling pipeline. It recently began clinical testing on a new treatment for advanced or recurring solid tumors in genetically defined cancers. Rocky performances come with the territory of biotech investing, and a small profit a year ago will likely be replaced by a small loss this time around.
Accounting software giant Intuit reports on Thursday. We're ankle-deep into tax season, and historically that means that Intuit's current quarter will be more relevant than the fiscal second quarter that ended in January. However, the fiscal second quarter that it will be discussing come Thursday is also relevant: It's usually the only other profitable quarter in Intuit's fiscal year. Unfortunately, the professional bean-counters see Intuit coming up short of last year's results.
Finally we have Red Robin Gourmet Burgers. There's a whole world of fast food out there outside of the golden arches, but it's not as shiny. Arby's is on the block. Burger King recently was taken private. Red Robin is pegged to earn just half as much in its latest quarter as it did last year.
Why the long face, short-seller?
These seven companies have 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.
BioMarin Pharmaceutical is a Motley Fool Rule Breakers recommendation. NVIDIA is a Motley Fool Stock Advisor pick. The Fool owns shares of Red Robin Gourmet Burgers, on which Motley Fool Options has recommended writing a covered strangle position. 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.