Martha Stewart Living Omnimedia ( MSO) can't seem to get on Wall Street's good side.

The New York-based media big has signed more merchandising deals than you can shake a stick at. It has even shown some modest improvement on the financial front, posting better-than-expected first-quarter numbers back in April.

But leading up to Wednesday morning's scheduled release of second-quarter results, Martha Stewart Living stock has resumed sinking. It recently fetched $14.89, putting it down 14% for the year and within a dime of its 52-week low. And that's due in large measure to the fact that the company's earnings power remains paltry.

Investors remain bearish on the homewares company, despite a rash of smart new deals. Martha Stewart signed a big merchandising deal with Federated's ( FD) Macy's in April. That move amounted to a well-executed end-run on partner Sears ( SHLD), which wouldn't play ball on an expanded partnership through its lower-end Kmart operation.

But the new deal with Macy's doesn't kick in until 2007, when upscale Martha-branded product will start to appear in national outlets. The company says it doesn't expect revenue from the Macy's deal until fall of 2007. And that's a big part of the weight on Martha Stewart Living shares.

Eastman Kodak ( EK) and Martha recently inked a photo deal that will start to produce cash in the fourth quarter of this year. And a promotional pact with KB Home ( KBH) was recently expanded to include a new community of Martha-branded homes outside of Houston.

But investors want to see the cash sooner rather than later. Despite the big splashes made by Martha's daytime TV show, her satellite deal with Sirius ( SIRI) and various magazines, there's a sense that the earnings power just isn't there.

Take a look at the Wall Street estimates for the company. Martha Stewart is expected to lose 16 cents a share for the second quarter ended last month on revenue of $66 million. While that means the company should narrow its year-ago loss by half and boost revenue by 43%, it's still a long way from turning a regular profit.

Indeed, analysts surveyed by Thomson Financial expect Martha Stewart Living to lose 11 cents a share for 2006 and to swing into the black only next year, with a 21-cent-a-share 2007 profit forecast.

Investors may still be feeling once burnt, twice shy about the company, given some reversals at Martha Stewart Living last year. The company became the source of investor indignation when it came to light that founder Martha Stewart's primetime TV show was lining her pockets and those of reality producer Mark Burnett, but not those of shareholders. The third quarter of 2005 included a charge of $11 million related to the vesting of Burnett warrants connected to The Apprentice: Martha Stewart which, along with a lack of earnings, left investors steamed.

But with the Burnett escapade and the emotion surrounding Martha Stewart's prison-stint past, management has worked hard to position the corporation for future growth.

Last quarter's beat offered some bright news. The company narrowed its quarterly loss from the previous year's period, driven by publishing and merchandising gains. Investors will look for similar results on the publishing side. An increase in ad commitments, along with visibility on the state of Blueprint, the company's new magazine offering, will be welcome on Wednesday.