It’s not a perfect world out there for investors, but things may be starting to get better. I recently went over some of the companies that are expected to post lower quarterly profits when they report this week. Thankfully, they’re the exceptions and not the rule.
Let’s go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.
|Company||Latest Quarter’s EPS (Estimated)||Year-Ago Quarter’s EPS|
|Herbalife Ltd. (NYSE:HLF)||$1.03||$0.86|
|SodaStream International Ltd(NASDAQ:SODA)||$0.38||$0.32|
|Trex Company, Inc. (NYSE:TREX)||($0.18)||($0.54)|
|Tesla Motors Inc (NASDAQ:TSLA)||($0.53)||($0.69)|
|IMAX Corporation (USA)(NYSE:IMAX)||$0.16||$0.14|
Clearing the table
Let’s start at the top. Herbalife has become one of the most fiercely debated public companies lately. Activist hedge-fund manager Bill Ackman has argued that the multilevel-marketing company is worthless. He questions the model in which hefty commissions encourage people to sell the wellness products at huge markups.
At the other end of the spectrum, you have folks including rival activist Carl Icahn and hedge-fund manager Dan Loeb who see a buying opportunity. Would Herbalife be buying back shares and paying out a healthy dividend if it wasn’t a real business? Icahn made things interesting last week, revealing in an SEC filing on Thursday night that he had taken a substantial stake in the company.
It’s against this backdrop that Herbalife is expected to post improving profitability on Tuesday. Ackman and fellow skeptics may argue that the financials are merely an opinion, but analysts think profitability will continue to improve here.
SodaStream checks in on Wednesday. The company behind the popular system that turns flat tap water into sparkling soda is on a roll. It closed out last year’s third quarter with record sales of starter systems, carbonator refills, and flavor bottles. In other words, folks are both buying the starter kits and actually using them.
SodaStream is coming off its first Super Bowl commercial earlier this month. Slurping cold soft drinks isn’t necessarily a wintry pastime, but SodaStream probably sold a ton of systems and consumables as holiday gifts.
Then we have Trex. The leading provider of wood-alternative decking has been bouncing back lately. The real estate market is showing signs of life, and improving home prices mean that fewer homes are underwater. As fears of foreclosure subside, it’s logical to see homeowners invest in home-improvement projects, and building weather-resistant decks is a popular choice.
This is a seasonal business. Consumers usually wait until spring and early summer to expand their living space with decks. Yes, Trex will probably post a deficit when it reports on Tuesday, but it’s expected to report a loss that is just a third of the red ink it posted during last year’s holiday quarter.
Tesla Motors has been revving up production of its Model S sedan. After niche success with its high-end Roadster, Tesla’s more inexpensive Model S hit the market this past June. That doesn’t mean you can head out to your nearest Tesla showroom and drive out with an electric car, though. There’s a long waiting list of buyers, and interest is already building for its Model X crossover.
Tesla isn’t profitable, though analysts see the electric-car speedster turning the corner by the end of this year. For now, investors will have to settle for narrower shortfalls.