I believe the market in aggreate (collection of all stock prices) does a fair job of anticipating the future. And just like everything else in life, there are exceptions at the micro / individual stock level as in the case of HR block, and people who do their homework (or insiders) can be a contrarian and benefit from it.
And EPS can certainly rise despite falling sales. You cut cost. How fast the effect can be seen depends partly on the industry. In my industry (fund management) the effect can be quick swift because the biggest contribution to cost is often people-releated … as opposed to capital intensive industries.