It happens to every company sooner or later: Wall Street sets a mark for quarterly earnings, and the company misses that goal. Sometimes an earnings stumble is a signal to sell, but digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down. Today, we'll try to catch a weak signal and a late late show, and then there's the hardware order that didn't ship yet.

Turn it up, Applied Signal
Our first downer today is security equipment maker Applied Signal Technology (NASDAQ:APSG). The company can help you find explosives through walls, but it couldn't find enough earnings in its own coffers to satisfy analyst forecasts. Applied Signal delivered just $0.08 in earnings per diluted share this quarter, while analysts expected that it would match last year's $0.15 per share. $39.5 million of revenues was equally underwhelming, considering that Wall Street had set the target at about $45.5 million.

The company pointed to stock-based compensation expenses and a tax hit related to them, as well as an increased contract cost reserve over last year, which altogether accounted for about $0.10 of lowered earnings. But that still doesn't account for the lower-than-hoped-for revenues. There, the fault lies with the lumpy nature of sales to mainly government agencies, an effect that is magnified for small companies like Applied Signal. With that in mind, it may be more fair to judge Applied Signal on the basis of trailing-12-month performance.

Unfortunately, that doesn't make the company look much better. On a TTM basis, sales for the latest period increased by 26% over last year, but trailing net income decreased from $8.6 million to $6.9 million, a 20% drop year over year. TTM operating margins shrank from 9.9% last year to 7% now, and net margins were cut from 6.2% to 3.9%. Revenue growth is accelerating, which is impressive, but operational issues keep the cash from filtering down to the bottom line.

If you need a piece of the Homeland Security action, you'd do far better with something like American Science & Engineering (NASDAQ:ASEI), a Rule Breakers pick that is managing its margins and growth far better. That stock trades at a premium valuation, but sometimes you get what you pay for.

Where's the mike, Carmike?
Let's move on to our second entry this week, movie theater operator Carmike Cinemas (NASDAQ:CKEC). The company runs its movie houses in small towns, staying out of large metropolitan markets where the competition is more intense. Unfortunately, that strategy doesn't appear to be working as well as the company hoped.

Analysts projected an average $0.06 profit per share on sales of $130 million, up from a loss of $0.20 per share on $120 million of revenues a year ago. What we got instead was a net loss of $0.53 per share, and revenues only slightly better than last year's. None of my information sources can remember the last time Carmike met or beat estimates, and the company hasn't filed financial statements on time since November, 2005. Indeed, CEO Michael Patrick said in the earnings report that he's "extremely pleased that we are now in full compliance with all of our SEC and NASDAQ filing requirements."

The last three reports, including this one, were delayed by the restatement of years of financial filings, due to issues with how the company recognized revenue. The restatement process is complete, and management says that it feels optimistic about its small-market strategy and the cash flows it will bring in. But annual net income has decreased in each of the last four years -- it's now negative -- and free cash flow turned negative two years ago. I'm not sure I'm buying the promise of smaller markets, given the track record here, although Carmike's closest competitor, Marcus (NYSE:MCS), is running a profitable chain of movie theaters in mostly smaller markets.

Carmike does have a plan that might pay off, though. Management is excited about digital distribution, and has enlisted the services of Access Integrated Technologies (NASDAQ:AIXD) to complete the rollout. Digital screens may or may not make a difference, but all-digital movie distribution could simplify Carmike's operations and might save a lot of money in the long run. I'll be sure to keep an eye on the progress in that area.

More hardware, please: Tech Data
The last stop on today's whirlwind tour of the market's downside is right in my own backyard. Clearwater, Fla., is home to computer hardware distributor Tech Data (NASDAQ:TECD), which was expected to deliver $0.03 of pro forma net profits per share on $4.9 billion of sales. The company matched the revenue target exactly, but came up $0.02 short on the earnings mark.

Those earnings figures exclude certain restructuring costs and tax effects in both the current and year-ago periods, and a goodwill impairment charge taken this quarter. Add those charges back in, and Tech Data lost $1.02 per share on a GAAP basis last year, and lost $2.81 per share this time. The impairment charge of $136 million against the value of the company's EMEA operations (Europe, Middle East, and Africa) seems to have been offset somewhat by a small increase in the North American goodwill value. The total amount of goodwill now on the balance sheet is a mere $3 million, versus $134 million a year ago.

The EMEA segment is undergoing a multi-year restructuring effort, and the company declines to hand out forward guidance because of the "challenging environment in EMEA." The overseas operations contributed 54% of total sales last year, but only 5.2% of the operating profits.

Tech Data is hard at work trying to improve operations, specifically in Europe, and that move looks very welcome. But it's also a matter of executing the improvement plan efficiently, and proof of that is scarce right now. Ingram Micro (NYSE:IM) doesn't appear to have as much trouble selling hardware in Europe, and that company also runs significant operations in Asia to make it more resilient to local market problems. Tech Data might become a value pick, but the turnaround has to get some traction first.

Time for a shower
Some of these underperformers are victims of larger circumstances, while others might have only themselves to blame. It's up to you to decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which really are stuck in the mud. Come back next Monday, and we'll take a look at another batch of mishaps and disappointments. It'll be fun and educational. Promise.

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American Science & Engineering is a Motley Fool Rule Breakers pick.

Fool contributor Anders Bylund holds no position in the companies discussed this week, but he lives 30 miles from the Tech Data headquarters. The Fool has a disclosure policy, and you can see his current holdings for yourself.