Shares in Leighton Holdings sank on Friday, despite doing better than expected, lifting guidance and dividend.
It seems once again analysts and some shareholders were too optimistic about the way Leighton was travelling and has boosted expectations for earnings.
Still Leighton seems to have emerged from the tough days of 2008-09 in strong shape and not even the problems in Dubai seem to have hurt the company.
But the shares fell $1.01, or 2.6%, to $37.29 on Friday.
Interim dividend was set at 65 cents per share, up from 60 cents at the same time last year.
Net profit came in at $288.88 million for the six months to December 31, up from $111.15 million in the previous corresponding period (which was hit by losses and asset write-downs.).
Revenue from the group and its joint ventures and associates was $9.012 billion, down 1% from the 2008 first half figure of $9.146 billion.
That was due to the impact of the stronger Australian dollar.
CEO Wal King said Leighton’s revenue was negatively impacted by currency movements, which chopped off around $500 million during the half.
The company is now forecasting a 2009/10 year net profit in excess of $600 million – an upgrade from its previous guidance of about $600 million.
That forecast, while encouraging, was a bit imprecise for some investors on Friday.
Annual revenue is expected to be around $19 billion for 2009-10.
"The group’s longer term outlook remains solid based on a record level of work in hand, a strong competitive position and a forecast rebound in the group’s core markets from the uncertainty of the global financial crisis," Mr King said in a statement.
"While the timing of recovery in the various markets will vary, the outlook is positive and the group is well positioned to take advantage of the opportunities being presented."
Sustained levels of government infrastructure spending on schools and projects such as the national broadband network, should provide good opportunities in the years ahead, he said.
Construction activity in the Middle East remains at high levels despite problems in Dubai, and that will provide a good base of work for Leighton’s operations there, Mr King said.
Work in hand at December 31 was worth $38.4 billion, above the $37 billion held six months earlier and Mr King said the company expects to see that above $40 billion by the end of June.
In contrast to the performance of Leighton shares, gold miner Newcrest saw its shares finish 24 cents higher Friday after it reported a 14% rise in net earnings for the December half.
Newcrest shares ended at $32.68, but might take a hit from the small fall in gold prices on Friday night after China tightened a key area of monetary policy for a second time in a month.
The gold miner reported net profit of $176.2 million for the six months to December 31, up from $154 million in the prior corresponding period.
Sales revenue fell 8.2% to $1.1875 billion, from $1.2942 billion.
Managing director and chief executive Ian Smith said in a statement it was a "strong financial result" and "Newcrest is in a strong position with low gearing, a number of growth projects nearing completion.
"The Cadia East project (is) on track for Board approval in early April 2010 and (Newcrest has) an exciting portfolio of exploration opportunities capable of delivering the next phase of organic production and earnings growth."
Newcrest said profit margins increased during the first half of 2009/10, reflecting higher realised gold prices and a lower cost of sales.
The company reported last month that gold production fell 6% by volume in the half, while copper production rose 6%.
Newcrest said sales of both copper and gold were lower "with an associated build in inventory".
"Increased inventory levels at period end will flow through to profit in the second half of the year," the miner said.
Several projects were expected to reach full production in the second half of 2009/10.
"Growth projects at Ridgeway Deeps, Gosowong and Hidden Valley are nearing completion and are expected to reach full production in the next six months," Newcrest said.
"Ridgeway Deeps is expected to be completed $40 million under budget at a total cost of $505 million."
The company declared an un-franked interim dividend of 5 cents per share, after declaring no dividend for the prior corresponding period.
Underlying profit was up 10% to $266.6 million, from $241.6 million in the prior corresponding period.
"The increase was primarily driven by higher profit margins achieved from lower sales revenue," Newcrest said.
World gold prices hit record levels in the last three months of 2009, but the strengthening Australian dollar clipped returns in local currency from gold and copper sales.
