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These 6 companies' profit just hit the wall

A man walks into Whole Foods Market in Brooklyn, New York, on May 7, 2014.
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A man walks into Whole Foods Market in Brooklyn, New York, on May 7, 2014.

It's the end of an era for six companies, where impressive stretches of uninterrupted earnings growth have just come to a sudden end.

Six companies in the Standard & Poor's 500, including retailers Bed Bath & Beyond, Costco Wholesale and Whole Foods Market and tractor maker Deere, reported lower or flat earnings in the first calendar quarter, ending what had been at least eight straight quarters of earnings growth, according to a USA TODAY analysis of data from S&P Capital IQ.

The sudden profit declines put an end to some of the most storied profit runs among large U.S. companies. Organic food seller Whole Foods has been on a blistering earnings growth run for years, including reporting 20 percent or more growth in five out of the past eight quarters. But that run came to an end in the first quarter when the company reported flat earnings per share of 38 cents a share.

Costco Wholesale witnessed the most dramatic end to what had been a storybook run of rising earnings. Diluted earnings per share dropped 15.3 percent in the first quarter. That decline comes after some heroic periods of earnings growth at the big-box retailer, including 38 percent growth in the first quarter of 2013.

The analysis measures diluted earnings per share before so-called extraordinary items. Profit measured this way excludes certain unusual items considered by accountants to be tangential such as retiring debt early and income tax benefits.

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Yet, at industrial company Danaher, the earnings growth streak ended with a 17 percent decline in quarterly diluted earnings per share in the first calendar quarter due to another kind of charge. The profit decline wasn't due to weakness in the business, but from a one-time gain of $230 million in the first quarter of 2013 from selling a joint venture. The year-ago gain resulted in a drop in earnings in the first quarter of 2014 since there wasn't a similar gain during the period. Yet, the company's normalized net income, which strips out the influence of such one-time gains, rose nearly 10 percent in the quarter.

Read MoreCompanies are beating earnings estimates—but don't be fooled

Investors have shown their displeasure with the companies ending their profit growth streaks. An equal-weighted index of the six stocks is down 6.5% since the first quarter ended on March 31. The S&P 500 during that time is flat.

Chart source: S&P Capital IQ

Still, investors shouldn't get too alarmed to see so many earnings growth streaks being broken. There are still 48 companies in the S&P 500 that have continued their streak of at least eight uninterrupted quarters of earnings growth and are working on their ninth in the current quarter. Four of those companies, including retailer Dollar General and food company J.M. Smucker, are expected to report their first calendar quarter in weeks.

Investors will be watching to see which of these companies can keep the streak alive.

Below are the six S&P 500 companies that reported lower diluted earnings per share in the first calendar quarter after posting gains for at least the past eight quarters:

Company
Symbol
Q1 2014 diluted EPS % change
Danaher DHR -17.00%
Costco Wholesale COST -15.30%
Bed Bath & Beyond BBBY -4.80%
Deere DE -4.00%
Whole Foods WFM 0%
U.S. Bancorp USB 0%
Source: S&P Capital IQ

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