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 get a jolt of low voltage, catch a flighty glimpse of imperfect optics, and enter into Cherokee Nation. Circle the wagons, boys -- I see smoke signals up ahead!

Volt Information Sciences (NYSE:VOL) is our first underperformer this week. Where the analyst community had expected sales of $605 million and net earnings of $0.62 per share, the company reported $585 million and $0.53 per share, respectively. Never mind that these figures represent 69% earnings growth and solid 7.6% revenue growth year over year -- that's still a double disappointment whammy, and the stock price dropped by 15.1% the following day.

So what went awry here? Volt is one of those interesting little mini-conglomerates or all-in-one keiretsu operations that do a little bit of everything, so let's take the thing apart and see what it looks like inside.

Staffing services are Volt's bread and butter, making up $499 million of the company's sales this quarter and $16.2 million in operating profits, out of a grand operating total of $26.3 million and up from just $7 million a year ago. That's 133% growth on that metric, and clearly the division is firing on all cylinders these days.

The computer systems segment grew revenues by 5.7%, but profits dropped by 24.9% to $6 million. This time last year, it was the company's most profitable division, but it's playing second fiddle to staffing now. The acquisition of German information software provider varetis last November is looking more dilutive than accretive at this point.

Then there's the telephone directory segment, which saw both sales and operating earnings drop to the tune of 10% and 24%, respectively. The company says that the sales drop is a result of uneven order timing, and management appears committed to this division for the long haul. Last Christmas, Volt bought out Nortel's (NYSE:NT) minority stake in subsidiary VoltDelta, which operates in this segment. For Nortel, that deal looked like a simplification of its business model, but for Volt it's a renewed commitment to an ailing business segment.

That leaves the telecommunications segment to round out the roundup. It saw sales shrink by 27% from the year-ago period, but overhead costs were lower, too, and gross margins went higher, so it all adds up to an operational improvement of $0.8 million. That leaves the division with an operating loss of only $0.2 million this quarter. The segment appears to run more smoothly now, albeit at the expense of a significant portion of its revenues.

Altogether, staffing did the heavy lifting here, while all other segments either shrank or delivered operational losses. It's hardly fair to call 69% earnings growth a failure, but the stock had appreciated by 86% year-over-year before the report aired. Clearly, investors had hoped to see some stunning numbers rather than merely great.

20/20 does not apply here
Let's move on to another market miscreant. Fiber-optics manufacturer Avanex (NASDAQ:AVNX) reported a net loss of $0.04 per share, worse than the expected $0.03 loss but much better than last year's $0.30 of red ink per share. Revenue grew by 6.6% over the year-ago period, and $45.5 million of sales beat the Street's hoped-for $44.3 million.

Management says that the corporate restructuring and retooled manufacturing processes that were completed during the past year have improved gross margins and reduced warranty requests, and points to three successful product launches in the most recent quarter as signs of a better future. Avanex counts Cisco Systems (NASDAQ:CSCO) and Alcatel (NYSE:ALA) among its largest customers, so the company should have a few growth opportunities available as long as these brobdingnagians keep up their own growth plans.

On the other hand, Avanex is deep in penny-stock land at the moment -- not that that's an uncommon attribute among optical networking specialists -- and has never turned a quarterly profit since going public in 1998. It has managed to show positive free cash flow on occasion, but not with any consistency. As bright-eyed and bushy-tailed as management sounds when talking about the future, the company has a pretty dismal track record. I'm afraid I'm not enough of a gambling man to take a flyer on a company this unproven. Try cranking out some profits and generating some cash, and then I'll take another look.

Indians at the pass!
I'm rounding out this week's assortment with brand management company Cherokee (NASDAQ:CHKE). Your local Target (NYSE:TGT) store may be peppered with the company's clothing brands, and most businesses would kill their parent companies for a 39.8% net income margin, but Cherokee still couldn't please the analysts this time.

Estimates of $12.4 million in gross revenues turned out to be on the money, but the net earnings target of $0.58 per share proved too optimistic, as the company managed just $0.56 per share. That's still 7.7% higher than last year's comparable period, and sales increased by 10.1%, which is a respectable performance from a mature company in a high-volume, low-growth industry.

Cherokee tried and failed to acquire fellow Target supplier Mossimo this quarter, and is still expecting to collect legal settlement fees and a finder's fee from eventual sweepstakes winner Iconix Brand Group. That haul should add about $34 million to net income in the coming quarter, or nearly three times this quarter's gross sales. Cherokee's ability to fund its generous dividend has been questioned by some Fools, but it looks like the payouts should be safe for another quarter or two.

It's a wrap
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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Fool contributor Anders Bylund holds no position in the companies discussed this week, but can often be seen wearing Cherokee apparel. The Fool has a disclosure policy, and you can see Anders' current holdings for yourself.