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. This week, one miscreant is spotty, one speaks the truth, and one's just really tiny.

This mosaic looks strange ...
First up this week, we have Mosaic (NYSE:MOS), a manufacturer of potash, nitrogen, phosphates, and other crop fertilizers and animal feed products. Earnings before one-time items came out to $0.14 per diluted share, down from $0.18 last year and far below analyst expectations of $0.23 per share. Sales dropped from $1.4 billion in 2005 to $1.29 billion this time around, and Wall Street had hoped for a slight revenue increase.

Management pinned the shortfall on lower phosphate volumes than expected and disappointing offshore sales. The company shut down three phosphate mines in Florida at the end of the previous quarter, reducing annual production capacity by about 7 million metric tons of various phosphates. The remaining facilities can produce about 25 million tons per year, which is quite enough to cover projected sales of about 10 million tons in fiscal 2007. Even that will take a "strong fall fertilizer season" to materialize, according to Mosaic management.

Fertilizer production might sound like an uncomplicated business, but let me assure you that it's not. It's very much a global marketplace, where low-cost producers can take sales away from manufacturers with higher expenses -- just call in a few barges and you can ship potash anywhere in the world at a reasonable cost. Last summer, as hurricanes in the Gulf of Mexico and turmoil in the Middle East pushed oil and natural gas prices through the roof, I made a little bit of money short-selling Terra Nitrogen units. The only raw material required to make nitrogen fertilizers is natural gas, and when the cost of making it exceeds the going price for the end product on the worldwide market, Terra likes to shut down operations entirely. Mosaic's nitrogen segment has been suffering from the same situation ever since last summer, facing intense price competition from producers in South America and former Soviet states.

The complex fertilizer marketplace makes it tough to make a call on Mosaic's future prospects. There are so many variables going into the equation, and very few of them are under management's control. The stock is trading at a premium to most of the competition, so it's hard to call this a deep value even with the retreat on natural gas prices and tighter operations. Let's leave Mosaic where we found it.

In vino veritas
Then we have geophysical information provider Veritas DGC (NYSE:VTS), another company tightly coupled to the fortunes of oil and gas producers. Veritas primarily helps oilfield operators make sense out of the geophysical information they gather, giving them a 3-D view of subterranean landscapes.

The quarterly report showed $0.16 of EPS, down from $1.31 last year and significantly below the estimated $0.42 per share. The $178 million of revenue also fell short of the expected $181 million, though it's a clear improvement over the year-ago $137 million take.

The precipitous earnings drop was mainly a result of a tough comparison. Back out a large one-time tax gain from the 2005 period and the result is earnings of $0.26 per share (still short of expectations, though). Even then, the company is pedaling backwards on the bottom line, though operating income increased from a $1.8 million loss to a gain of $12.4 million on the back of profitable land deals in Alaska and Canada.

The disparity between operating success and net failure comes from some more tax shenanigans and $9.9 million of insurance-related gains in the year-ago period. If you're interested in understanding Veritas better, I'd suggest focusing on operational results and sales performance rather than net income, at least for starters. The tax allowance activity and other issues make it hard to draw a bead on this company from the bottom line alone. Once the full 10-K is released with proper cash flow information, we'll have an even better picture. Until then, consider Veritas an extra-credit assignment.

Micron's miss
Rounding out the lineup this week is memory maker Micron Technology (NYSE:MU), which produced $0.08 per share of net earnings on $1.4 billion of sales, up from $0.07 per share and $1.3 billion last year. The average analyst forecast called for earnings of $0.14 per share, though they were fine with the revenue tally.

With DRAM memory prices on the rise (thanks to a steady demand but lower supply, as manufacturers have retooled some of their production lines to jump on the flash memory bandwagon instead), Micron should have turned in a nice fat profit this quarter, but that dream did not come true. The company still derives half of its sales from DRAM products, but a joint venture with Intel (NASDAQ:INTC) involving flash memory and the acquisition of Lexar point to greater ambitions in the flash market.

With the massive distribution channels that the Lexar consumer brand brings into Micron's portfolio, the company is gearing up to take on SanDisk (NASDAQ:SNDK) head-to-head, with Apple's (NASDAQ:AAPL) iPod product line remaining a distant speck on the horizon, far ahead in the flash-based music player market. The earnings release talks about flash opportunities as if that memory type was the second coming of Elvis, and "diversification" away from standard computer memory is a major theme.

I'm not so sure that this is the right time to move out of the computer memory field. Microsoft (NASDAQ:MSFT) is set to release Vista, the next version of Windows, in just a couple of months, and the expected rush of upgrades will surely increase memory demand even further, giving companies like Micron a large market with juicy margins to chew on. Then again, nobody ever said CEO Steve Appleton likes to play it safe. I'm not enough of a gambler to bet my hard-earned money on Micron, though.

Farewell, Fool
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.

Further Foolish Reading:

Seeking great deals on unfairly punished stocks? Philip Durell and his merry band of Fools at the Motley Fool Inside Value newsletter service are standing by to help you find great stocks at ridiculously low markdowns. Try a 30-day trial subscription to see whether bargain-hunting is right for you. Intel and Microsoft are already official Inside Value picks.

Fool contributor Anders Bylund holds no position in the companies discussed this week. He finds it tough to focus with the neighbor's driveway under demolition right outside the window. You can see his current holdings for yourself. The Fool has a disclosure policy.