These three companies just didn't live up to Mr. Market's expectations last week. 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.

While the Bear Stearns (NYSE: BSC) debacle would easily fit this column, it has already been covered in great detail by other Fools. We're pressing on to a few lesser lights here.

Fasten your seat belts
First up today is recreational vehicle veteran Winnebago Industries (NYSE: WGO). Analysts had expected earnings around $0.23 per share on $178 million of revenue, but the company delivered only $0.09 of EPS on $164 million in sales. That's a year-over-year drop of 17% in sales, and a more than 60% loss on the bottom line. President Bob Olson seemed happy just to have a net profit to show in this difficult economic environment.

Consumers are having a harder time converting home equity into RVs these days, and when you add in the rising gas prices, you get a powerful double whammy across the entire RV industry. Winnebago and Fleetwood Enterprises (NYSE: FLE) have seen their stock prices nearly cut in half over the past year, and Thor Industries has fared slightly better with a mere haircut of around 20%.

The company took action by cutting 300 jobs -- 9% of the workforce -- over the past quarter. Olson explained that this will help Winnebago "achieve our primary objective, which is to build quality motor homes while remaining profitable."

And the $60 million share buyback authorization is on hold until management can convert some short-term securities into cash. A failed auction on $54 million in debt papers in February inspired the company to reclassify its entire short-term investment balance as long-term investments for now.

The baby boomers aren't getting any younger, which should bode well for 'Bago, Thor, and the rest in the long run. But it'll be a bumpy ride until the credit market sorts itself out.

Cut the tension with a knife
Next up, we have soon-to-be-acquired drug developer Encysive Pharmaceuticals (Nasdaq: ENCY). The company reported a $0.18 loss per share on $12.8 million revenue. Wall Street wanted a smaller $0.16 loss per share, but would have settled for $10 million in sales, Last year, the loss was $0.44 per share on $5.4 million of sales.

Management is hoping and praying for a quick resolution to the pending acquisition by Pfizer (NYSE: PFE), or the company might not last another two quarters. Encysive's claim to fame is the Thelin treatment for a fatal form of pulmonary hypertension, and the company hopes to sell about $45 million of it in 2008.

That's all in Europe, though -- the drug has not received full FDA approval in the United States. Until the Pfizer deal goes through, Encysive is running on a skeleton crew, having slashed most of the U.S. sales force and research personnel to focus on the European market. The company is leaving with a whimper, not a shout.

Sleight of hand ain't enough
There's only one underperformer left on the dance card this week, and it's gadget guru Palm (Nasdaq: PALM). Before the report, this Fool wondered if the company could atone for lower margins by way of higher volume, and the results are in: No, it didn't work out.

A non-GAAP $0.16 loss per share on $312 million in sales compared badly to analyst expectations of a $0.14 loss per share on $315 million in sales. The revenue number was also less than last year's $410 million.

The gross profit dropped sequentially from $103.8 million last quarter to a paltry $93.2 million this time. Management says that its low-cost, full-featured Centro handset is responsible for the relatively steady sales, and notes that the model is getting end-users to upgrade from traditional not-so-smart phones rather than cannibalizing the high-end Treo line.

Then again, Palm doesn't need to eat its own premium line, because Apple (Nasdaq: AAPL) and others are doing it for them. All told, the trade-off between volume and margins is hurting the gross profits.

It's a new era for Palm. The company has been relegated to a low-cost market rather than the juicy high-end market to which it has long been accustomed. There's a changing of the guard in the handset market, and the upstarts are looking mighty hungry. Maybe Palm can regroup and, I don't know, introduce developing nations to the joys of mobile Internet access. But I wouldn't bet my own money on that long shot.

Foolish finale
Some of these underperformers are victims of 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 ones are stuck in the mud for real.

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. Pfizer is both an Inside Value pick and an Income Investor idea; Apple and Palm are sharing bunk beds in the Motley Fool Stock Advisor newsletter.

Fool contributor Anders Bylund holds no position in the companies discussed this week. He's probably decades away from buying a Winnebago or needing hypertension medication. Or so he hopes. The Fool has an ironclad disclosure policy, and you can see Anders' current holdings for yourself.