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Adobe Systems Incorporated (ADBE), Finisar Corporation (FNSR): 5 Reasons to Worry About This Week

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The economy is showing signs of fumbling the recovery.

Adobe Systems Incorporated (ADBE)Mortgage rates are now at a 52-week high, and just wait until that disrupts the housing boom and markets for other big-ticket financed items.

There’s also that Gallup poll released yesterday, showing that the confidence that Americans have in Congress has fallen to an all-time low. Yikes!

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 that aren’t growing their earnings. 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
Adobe Systems (NASDAQ:ADBE) $0.34 $0.60
Finisar (NASDAQ:FNSR) $0.17 $0.21
Jabil Circuit (NYSE:JBL) $0.54 $0.64
TIBCO Software (NASDAQ:TIBX) $0.18 $0.26
Darden Restaurants (NYSE:DRI) $1.04 $1.15

Source: Thomson Reuters.

Clearing the table
Let’s start at the top with Adobe Systems Incorporated (NASDAQ:ADBE). The leading maker of desktop publishing software has been in for a rude awakening on this side of the dot-com revolution. Why pay for Photoshop when Instagram can doll up a digital snapshot? Why whip up a PDF document on Acrobat when free Google Documents will do the trick? There will never be iOS support for Adobe Systems Incorporated (NASDAQ:ADBE)’s Flash, will there?

It’s against this backdrop that revenue and profitability are sliding. Analysts see a 10% dip in revenue with profitability being shaved nearly in half.

Finisar Corporation (NASDAQ:FNSR) is also slumping. Optical networking should be doing better these days. If we are in an economic recovery, companies should be investing in Finisar’s fiber-optic subsystems and components.

They’re not. Finisar Corporation (NASDAQ:FNSR) has seen its revenue dip 3% through the first three quarters of fiscal 2013. Business turned up during the third quarter — and revenue is expected to inch slightly higher this time around — but it isn’t expected to be enough to lift fiscal 2013 into positive territory.

Lazard upgraded Finisar Corporation (NASDAQ:FNSR) last month — going from “neutral” to “buy” — arguing that pessimism was too thick. Slapping a $17 price target given the “sufficiently deflated expectations” and “underestimated datacom catalysts” seems well-reasoned enough, but it’s hard to get excited about Finisar Corporation (NASDAQ:FNSR) as long as profitability is falling.

RBC Capital had some encouraging words for Jabil Circuit, Inc. (NYSE:JBL) earlier this week. The analyst is encouraged by the electronics contractor’s near-term prospects as enterprise seasonality and synergies of its recent merger with plastics contract manufacturer Nypro kick in. Jabil Circuit, Inc. (NYSE:JBL) completed its purchase of Nypro two months ago.

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