Did the market really close higher yesterday?
Phew! The S&P 500 had closed lower in each of the six trading days before Thursday's bounce. Six days may not seem like a lot, but it's the longest streak of daily dips in just over two years.
Then again, it's not as if every stock deserves to be treated like a winner.
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 EPS (estimated)
Year-Ago Quarter EPS
Research In Motion
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 Agilysys. The provider of enterprise solutions for the retail and hospitality industries hasn't been checking out lately. When it reports tomorrow, investors will probably be dealt its fourth quarterly deficit over the past five periods. Red ink isn't fatal, but the dramatically wider loss that the pros are expecting is problematic.
Best Buy has posted back-to-back quarters of dips in revenue, income, and store-level sales. The consumer electronics chain is now looking at strike three.
What happened to Best Buy? Wasn't it supposed to be the big winner when Circuit City liquidated two years ago? Unfortunately, shoppers continue to flock to cheaper e-tailers. It also doesn't help that a lot of the media that takes up so much of its floor space -- CDs, DVDs, books, and now video games -- are being delivered to growing numbers digitally.
Synutra is a leading maker of infant formula in China. Even given China's population-curbing practices, Synutra should be growing like many of the babies relying on its products. It's just not happening, though. Wall Street expects revenue to take a nearly 30% hit as a year-ago profit becomes a stiff quarterly loss.
School Specialty provides educators with supplemental learning products. This naturally isn't going to seem like much of a growth industry at a time when state budgets are tight. A wider loss during a seasonally soft quarter isn't going to take anybody by surprise, but did you know that School Specialty has missed analyst profit guesstimates in three of the past four quarters?
Winnebago is another company that isn't really a surprise to find on this list. Between pesky gasoline prices and a bruised housing market, who is going to spring for a new house on wheels? Well, at least it's profitable.
Finally, we have Research In Motion. We knew that this day would come. After years of heady growth, the bottom line is finally going the wrong way for the BlackBerry maker. The success of Apple's
Why the long face, short-seller?
These six 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.