5 Reasons to Worry About Next Week: The Western Union Company (WU), Communications Systems, Inc. (BRCD) and More

Page 1 of 2

The economy is showing signs of fumbling the recovery.

We’re now more than a month into the new year, and it won’t be long before the economy begins feeling the impact of the payroll tax increase that kicked in this year.

Economists feel that the move will swallow up roughly $120 billion in disposable income and shave 50 basis points off our country’s economic growth this quarter.

The Western Union Company (NYSE:WU)The news isn’t just iffy on the macro level. There are also more than a few companies that aren’t pulling their own weight in this supposed economic recovery.

There are still plenty of names posting lower earnings than they did a year ago. Let’s go over a few of the companies that are expected to go the wrong way on the bottom line next week.

Company Latest-Quarter EPS (estimated) Year-Ago Quarter EPS
American Capital Ltd. (NASDAQ:ACAS) $0.25 $0.67
The Western Union Company (NYSE:WU) $0.35 $0.39
Cliffs Natural Resources Inc (NYSE:CLF) $0.60 $1.42
Alpha Natural Resources, Inc. (NYSE:ANR) ($0.55) ($0.07)
Brocade Communications Systems, Inc. (NASDAQ:BRCD) $0.16 $0.20

Source: Thomson Reuters.

Clearing the table
Let’s start at the top with American Capital. Investors approach business-development companies for their chunky yields, but that no longer applies here. American Capital hasn’t paid out a dividend since 2009. This doesn’t mean that the company hasn’t been returning money to shareholders. It’s been actively repurchasing its shares, and that’s a move that makes sense since American Capital is trading at a discount to its book value.

Analysts see the company posting a sharply lower profit on Monday than it did a year earlier, and that’s not going to make it want to dust off its stance of cash distributions. Then again, American Capital has posted better-than-expected results in each of the past four quarters. In other words, the trend here would indicate that its bottom line is holding up better than Wall Street thinks.

The Western Union Company (NYSE:WU) has been the leader in global payment services for years. The company processed 226 million consumer-to-consumer transactions in 2011 through its network of 510,000 agents across 200 countries and territories.

Unfortunately for Western Union, business is slipping. Analysts see revenue and earnings slipping in the fourth quarter, and they see the same thing happening this year, too. Are folks just not wiring money anymore, or have PayPal, Square, and other platforms taken Western Union’s growth baton?

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!