Things aren't as rosy as some of this week's stock rallies seem to suggest. The Conference Board reported this week that consumer confidence in this country is at a two-year low.
Am I the only who remembers how scary things were two years ago? It was a lot hairier three years ago, but few knew if the market rally that began in the spring of 2009 was the real deal.
It's not just about the sentiment of your neighbors.
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
Forest City Enterprises
Smith & Wesson
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.
Altera isn't actually reporting its quarterly financials. However, the provider of programmable solutions will be delivering its mid-quarter business update after Tuesday's close. Analysts are already braced for a pullback, targeting a profit of $0.64 a share. Altera earned $0.69 a share a year earlier.
Altera did hike its dividend earlier this summer, so it's more than likely that the year-over-year declines that Wall Street is forecasting for the next two quarters will be temporary.
Forest City Enterprises is a real estate company with $11.5 billion in total assets. This naturally isn't a very scintillating industry these days, but Forest City has blown past analyst estimates in its two previous quarters.
Hooker Furniture makes and imports wood, metal, and leather furnishings for the home. Investors drawn to Hooker's significant 4.4% yield will want to keep an eye on the direction of earnings growth now and in the future.
Firearms maker Smith & Wesson is still missing its bottom-line targets. Earlier this summer, Smith & Wesson's crosshairs guided investors to expect 10% growth in fiscal 2012. Unfortunately, the pros see profitability going in the other direction in the fiscal year that ends in April.
Activist investors are shaking things up at Talbots, and it's about time. The stodgy retailer has been an underperformer relative to its mall rivals for years. Shareholders still standing by management may have a change of heart after the company posts a quarterly loss next week, reversing a year-ago profit.
Globecomm has seen better days. The provider of satellite-based communications infrastructure solutions is pegged to deliver a profit of $0.14 a share for its quarterly report on Thursday, well short of the $0.19 a share it came through with last year.
Finally, we have Aceto. The distributor of pharmaceuticals, chemicals, and crop-protecting products is well-liked around Fooldom, even if it's not a household name. The company commands the highest five-star rating in Motley Fool CAPS. I wonder how the bulls will feel about the likely dip in earnings next week.
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.
Motley Fool newsletter services have recommended buying shares of Hooker Furniture. 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. The Motley Fool has a disclosure policy.
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.