With the clock counting down the final few trades of 2011, the final tally is shaping up to be a bit of a letdown.
Despite Mr. Market's volatile ways, the market is notching what should be a flattish performance in 2011. It could have been worse, but things still aren't pretty out there. Just wait until you hear what Corporate America has to say next week.
There are still plenty of companies posting lower earnings than they did a year ago. Let's go over a few of the names that are expected to go the wrong way on the bottom line next week.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|Progress Software (NAS: PRGS)||$0.33||$0.47||Add|
|Sonic (NAS: SONC)||$0.09||$0.10||Add|
|Apollo Group (NAS: APOL)||$1.18||$1.63||Add|
|Constellation Brands (NYS: STZ)||$0.53||$0.66||Add|
|Ruby Tuesday (NYS: RT)||($0.05)||$0.07||Add|
|Saba Software (NAS: SABA)||($0.11)||$0.02||Add|
|Xyratex (NAS: XRTX)||$0.33||$0.69||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Progress Software.
Progress tapped Jay Bhatt as its new CEO a few weeks ago, replacing longtime helmsman Richard Reidy. In other words, Bhatt didn't have anything to do with the enterprise software company's most recent quarter. That obviously doesn't take away from the fact that analysts see Progress posting its third consecutive quarter of year-over-year declines in profitability.
Sonic runs the throwback chain of drive-in burger joints. Don't be surprised if a server on roller skates pulls up to your car with your order! However, the company's financial performance hasn't been as festive as the vibe. To be fair, most fast-food chains that aren't donning golden arches at the front have been struggling in recent years.
Apollo is the leading provider of for-profit post-secondary education. Yes, this is the company behind the University of Phoenix. Unfortunately, Apollo hasn't exactly risen from the ashes since the industry was blasted for aggressive enrollment techniques and crummy student loan repayment rates.
Investors are unlikely to raise a toast to celebrate Constellation Brands' latest quarter, and that's a pity. Constellation is the company behind Mondavi wines and Svedka vodkas. Liquor may have some all-weather appeal, but this isn't just a problem on the bottom line at Constellation Brands. Wall Street is projecting a 25% slip in revenue for its latest quarter -- and a 20% slide for all of this fiscal year, which ends in February.
Ruby Tuesday is the casual dining chain that takes its name from a somewhat popular Rolling Stones song. Maybe it's a bad omen. After all, Mick Jagger is singing "goodbye Ruby Tuesday." It doesn't matter. The pros are bracing for a small loss from the previously profitable eatery.
Saba Software is also expected to turn a year-ago profit into a deficit. It will be Saba's third straight quarterly loss, but at least revenue at the human resources software provider is growing.
Finally, we have Xyratex. Data storage was a hot sector a year ago when PC giants were scrambling for some skin in this potent enterprise niche. Now Xyratex's looking pretty mortal. The tech company is expected to earn less than half what it rang up a year earlier when it reports Thursday afternoon.
Why the long face, short-seller?
These companies have seen better days. The market has rewarded many of these stocks with reasonable gains over the past year, but they still haven't earned those upticks.
The good news here is that Wall Street already expects these companies to deliver shrinking bottom lines. In other words, the bad news is already baked into the shares.
The more I think about it, the less worried I become.
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At the time this article was published 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.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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