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

Cliffs Natural Resources reports on Tuesday. The mining and natural resources company was slated to offer up its latest financials on Wednesday, but yesterday it announced that a scheduling conflict will bump the report a day early to Tuesday after the market close.

Wall Street sees Cliffs Natural Resources checking in with a profit of $0.60 a share, but don’t be surprised if it’s lower than that. It has missed analysts’ profit targets by wide margins in each of its past four quarters. Either way, it’s a safe bet that it will fall well short of the $1.42 a share it earned a year earlier.

Alpha Natural Resources is one of the country’s largest coal producers. This has been a volatile sector lately. You have to go all the way back to the third quarter of 2011 to find the last time that Alpha Natural Resources turned a profit, and the pros are braced for another lump of coal in its holiday stocking. The problem here is that Wall Street sees a much larger deficit out of Alpha Natural Resources this time around.

Finally, we have Brocade Communications Systems, Inc. (NASDAQ:BRCD). Unlike the four other companies mentioned here, Brocade’s actually expected to grow its revenue in next week’s report. The same can’t be said for its bottom line. Analysts see the networking solutions provider ringing up net income of $0.16 a share after posting a healthier profit of $0.20 a share during the prior year’s fiscal first quarter.

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. Lower earnings translates into higher earnings multiples, and nobody wants to see that happen.

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.

The article 5 Reasons to Worry About Next Week originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Western Union.

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