With just two trading weeks left in 2011, is it too late to ask for a rain check?
As of yesterday, the S&P 500 is off by 3% this year. It feels worse given all of the volatility that we've had until this point. We can always hope that 2012 will be kinder, but we're still not done yet.
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
Carnival (NYS: CCL)
ConAgra (NYS: CAG)
Jefferies (NYS: JEF)
Sanderson Farms (NAS: SAFM)
Shaw (NAS: SHAW)
KB Home (NYS: KBH)
Christopher & Banks (NYS: CBK)
Source: Thomson Reuters.
Clearing the table
Let's start at the top with Carnival.
The world's largest cruise ship operator posted better-than-expected results in its most recent quarter, but Carnival still trimmed the high end of its bottom-line outlook. Passengers are having no problem paying up for the cruise line's pampered voyages, but high fuel costs are eating into profitability.
Analysts see revenue growing 8% when Carnival delivers its fiscal fourth-quarter results on Tuesday, but they still see the earnings as a ship going in the other direction.
ConAgra is the food giant behind Chef Boyardee canned pasta, Pam nonstick cooking spray, and Hebrew National hot dogs. I'm only scratching the surface, so check your cupboard or fridge and there's a fair chance that you'll run into another one of their products: Reddi-wip whipped cream, Healthy Choice frozen entrees, or Hunt's canned diced tomatoes. These may seem like steady, all-weather staples, but margins are hard to keep steady when you have so many moving parts.
Jefferies Group is an investment banker at a time when financial services are coming under critical fire. Corporate life goes on, though. Companies need to buy companies, and cash-strapped firms need to raise money. However, Wall Street figured that this Wall Street player will earn less than half as much as it did a year earlier.
Sanderson Farms isn't playing chicken. The poultry producer really is more than likely to post its fourth consecutive quarterly deficit. High corn prices are making it harder for poultry farms to feed their animals. Chickenfeed isn't chickenfeed these days.
Shaw provides vertically integrated solutions for the energy, chemicals, environmental, infrastructure, and emergency response industries. Bulls may not believe that Shaw is projected to earn just $0.45 a share in its latest quarter, but it may very well be even worse. Shaw has posted sharply lower bottom-line results than what the pros were targeting in each of the three previous quarters.
KB Home is a homebuilder. That should pretty much say it all, but with mortgage rates at historic lows and real estate prices starting to bottom out, shouldn't a real estate developer at least be doing better than it was a year earlier?
Finally we have Christopher & Banks. There isn't a lot of mystery here. The women's apparel retailer delivered bleak preliminary results for its latest quarter two days ago. Next week's report will basically be a formality to make the red ink official. Things are so bad that Christopher & Banks is suspending its dividend. It may not be the only thing that needs to be suspended.
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.
How do you think these stocks will fare when they report next week? Share your thoughts in the comments box below.
At the time thisarticle 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 theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.