Please ensure Javascript is enabled for purposes of website accessibility

5 Reasons Not to Worry This Week

By Rick Munarriz - Oct 22, 2012 at 5:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Not every company will be posting lower earnings this week.

It's not a perfect world out there for investors.

Don't take Friday's sharp market sell-off as a fluke. There were a lot of disappointing quarterly reports last week, and this week will be ripe with some implosions of its own.

I recently went over some of the companies that are expected to post lower quarterly profits when they report this week.

Thankfully, they're the exceptions and not the rule. Let's go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.


Latest Quarter EPS (estimated)

Year-Ago Quarter EPS



Western Digital (WDC 2.96%)




VMware (VMW 2.98%)




Akamai (AKAM 0.96%)




Apple (AAPL 2.62%)




IMAX (IMAX 5.08%)




Source: Thomson Reuters.

Clearing the table
Let's start at the top with Western Digital.

Making hard drives may seem to be a hard life these days. Aren't folks buying fewer PCs now? Well, not so fast. Western Digital still shipped a whopping 71 million hard drives in its previous quarter, and the company also is a player in the more nimble solid-state drive market.

If you want more proof that Western Digital is bucking the trend, check out where Wall Street is perched. The pros see profitability more than doubling on a 48% pop in revenue.

It gets better. Over the past year, Western Digital has blown through analysts' income forecasts. It hasn't even been close, with the storage specialist besting bottom-line prognostications by 15%, 113%, 59%, and 36%, respectively, over the past four quarters.

VMware is another speedster that has been routinely outsmarting the analyst community. The virtualization software giant is also four-for-four over the past year, though VMware's beats have been more modest. It hasn't surpassed expectations by more than 10% in any of its four previous quarters.

Then again, VMware doesn't need to beat Wall Street's profit target to land well ahead of where it was a year ago.

Akamai may be a surprising name on this list. The country's largest content-delivery network helps companies serve up faster streams, downloads, and website pages. This was starting to seem like a cutthroat niche a couple of years ago, especially when desperate smaller rivals were willing to take big hits just to land new accounts. The market is still competitive, but there's just so much demand out there that everybody with a server farm is busy these days.

Apple is no stranger to this list. The world's most valuable tech company has been delivering monstrous growth for years. This should be another solid quarter for Apple, especially since it was able to introduce the iPhone 5 just weeks before the period came to a close.

It's understandable if even bulls are worried this time, though. Apple came up short in its previous quarterly outing. It also doesn't help that iPod sales have been declining and Mac sales have stalled. Is there enough juice in the company's booming iPad and iPhone lines to keep this great growth story going? Analysts seem to think so. They see Apple increasing its revenue and earnings by 28% and 25%, respectively, this quarter.

Finally, we have IMAX. The provider of super-sized theatrical experiences is in a problematic industry. Box office receipts fell last year, and 2012 isn't shaping up to be any better. The silver lining in IMAX's silver screen is that folks are still willing to pay a premium to see Hollywood blockbusters on its sensory-awakening platform. There's also international growth working in IMAX's favor as China, Russia, and other countries begin embracing IMAX makeovers of their tired multiplex screens.

Cross those fingers, but know the fundamentals
Investors in these five stocks have a right to be excited. They are all improving their financial situations. They are worthy of the gains that the market rally has bestowed upon them over the past year.

I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings.

The expectations may be high, but these five stocks wouldn't have it any other way.

If you like following winners -- and you probably do, since you're reading this article -- a new report singles out three winners in retail. The free research will only be available for a limited time, so click here to check it out now.


Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Imax, VMware, and Western Digital. Motley Fool newsletter services recommend Apple, Akamai Technologies, Imax, and VMware. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$169.24 (2.62%) $4.32
VMware, Inc. Stock Quote
VMware, Inc.
$120.03 (2.98%) $3.47
IMAX Corporation Stock Quote
IMAX Corporation
$16.77 (5.08%) $0.81
Western Digital Corporation Stock Quote
Western Digital Corporation
$47.68 (2.96%) $1.37
Akamai Technologies, Inc. Stock Quote
Akamai Technologies, Inc.
$95.99 (0.96%) $0.91

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.