The economy is showing signs of fumbling the recovery.
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|
|Jabil Circuit (NYSE:JBL)||$0.54||$0.64|
|TIBCO Software (NASDAQ:TIBX)||$0.18||$0.26|
|Darden Restaurants (NYSE:DRI)||$1.04||$1.15|
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.