5 Reasons to Worry About Next Week: Zynga Inc (ZNGA), The Walt Disney Company (DIS) and More

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The economy is showing signs of fumbling the recovery.

For the first time in three years, the country’s gross domestic product — or GDP — took a step back.

Sure, the 0.1% decline isn’t as gloomy as it may first seem. Between the U.S. government scaling back its spending and Hurricane Sandy wreaking havoc during the early weeks of the quarter, there were plenty of headwinds facing the economy.

However, many of the consumer-facing components held up better than that. At the end of the day, GDP expanding by 2.2% for all of 2012 after inching 1.8% higher the year before that isn’t terrible. The rub here, though, is that analysts weren’t expecting a decline at all for the quarter.

Zynga Inc (NASDAQ:ZNGA)

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
Glu Mobile Inc. (NASDAQ:GLUU) ($0.07) ($0.02)
The Walt Disney Company (NYSE:DIS) $0.76 $0.80
Zynga Inc (NASDAQ:ZNGA) ($0.03) $0.05
TriQuint Semiconductor (NASDAQ:TQNT) $0.02 $0.08
Exelon Corporation (NYSE:EXC) $0.64 $0.82

Source: Thomson Reuters.

Clearing the table
Let’s start at the top with Glu Mobile. The developer of mobile games including Deer Hunter and Blood & Glory has tried to make its mark in “freemium” diversions. These are mobile games that are free to play in ad-supported mode, but then engaged players are encouraged to pay up for virtual goods that enhance the experience.

Yes, this is a growing market. Unfortunately, it’s also one with meager barriers to entry. The programming tools are out there for even modest developers to put out the next great app.

Analysts see Glu Mobile posting its fourth loss in five quarters on flat revenue growth.

Disney is a surprising name to see on this list. ESPN is a steady grower. Its theme park resorts should be hopping after the recent additions of Cars Land in California and New Fantasyland in Florida. The family entertainment giant does experience lumpiness as its theatrical releases work their way through the distribution cycle. If Disney’s quarterly performance is pitted against a blockbuster a year earlier or if it’s come up short at the box office this time around, the bottom line can get volatile.

At the end of the day, Wall Street sees Disney posting a slight dip in profitability on a mere 4% top-line advance.

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