Curtain Set To Draw On Local Earnings Season
The Australian December half 2017 earnings reporting season ends this week (Wednesday is the official cut off) with around 20 major companies reporting including BlueScope and QBE (today) and Adelaide Brighton and Harvey Norman (Wednesday).
QBE and Adelaide Brighton will be revealing full year figures, as well Caltex Australia which is due to report its full year figures today, while beach minerals group, Iluka also produces its full year figures tomorrow.
Fruit and vegetable group, Costa Group is another to report (interim) figures, along with Select Harvests, Cabcharge, PMP, Bega Cheese (not last week) and Virgin Australia.
Last week saw solid reports from the likes of a2 Milk, Bellamy’s, Blackmore’s (although the outlook for both were week), BHP, Oz Minerals, Woolies but not Wesfarmers. Speciality fashion group is still alive and waiting for a bid, The Reject Shop is surviving, while Northern Star produced some fabulous gold figures in a series of new finds, plus a good interim result.
In his weekly commentary, Dr Shane Oliver, the AMP’s Chief Economist pointed out that this reporting season has seen the “highest share of Australian companies seeing profit gains since the GFC, but profit growth still lagging globally where profit growth is running around 14%.”
"The December half profit reporting season is around 90% done and has been pretty good. 46% of results have exceeded expectations (against a norm of 44%), 73% of companies have seen profits rise from a year ago (compared to a norm of 65%) which is the strongest since the GFC and 66% have increased dividends from a year ago with 27% keeping them flat which is a sign of ongoing confidence in the outlook.
"Reflecting the reasonable quality of results 57% of companies have seen their share price outperform the market the day results were released (against a norm of 54%).
“Partly reflecting the uncertainty around the global correction in share prices, good beats were greeted with sharp share price gains particularly when Price Earnings ratios were low (eg Nine and Qantas) and misses were hit hard (eg Blackmores).
"Consensus profit growth expectations for this financial year remain around 7%, with resources upgraded slightly to 15% and the rest of the market downgraded to 5% (from 6%) owing to a downgrade to banks. Profit expectations for 2018-19 were actually upgraded to 5% (from 4%) thanks to resources,” Dr Oliver wrote at the weekend.
Source: AMP Capital
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.