The Australian December half profit reporting season ramps up this week with 27 major companies reporting including JB HiFi, Cochlear, Commonwealth Bank, Rio Tinto and the ASX.
In the US, the December 31 reporting season continues, with a slew of media groups due to release quarterly figures, along with Twitter (which should be interesting given the big sell off in tech stocks on Wall Street on Friday).
But attention this week will be on local companies – Rio’s full year earnings and decision on its dividend on Thursday will be a scene setter for the wider market (which won’t have a lead from Chinese markets which will be closed this week).
And on Wednesday, the half year result of the Commonwealth Bank will set the tone for the bankings generally and the wider market.
And one other result that should be watched for is the half year from JB HiFi later today. It hasn’t updated guidance,so it can be assumed it is on track to report a higher result, which after the implosion of Dick Smith and good figures from Harvey Norman, should help ease concerns about the health of retailing stocks.
According to the AMP’s Chief Economist, Dr Shane Oliver, key themes in reports “are likely to be: ongoing horrific conditions for resources companies (where 2015-16 earnings are expected to fall another 61%); continued modest profit growth for the rest of the market (of around 5%) led by healthcare, building materials, general industrials and discretionary retail; help from the lower $A; and an ongoing focus on cost control."
And he says that “given the significant downwards revision to earnings expectations and the fall in the share market so far this year there is some chance we will see upside surprise.”
Today JB HiFi leads the reporting companies, with announcements from Coffey International, Ansell (which has already cut guidance and seen its shares plunge 20% on Friday), Capilano Honey, and 21st Century Fox in the US.
Tomorrow, reports from Bradken, Cochlear, Slater and Gordon (whicxh might be delayed given their problems) and Royal Wolf Holdings are due to issue results.
On 27 or more companies will report earnings including AGL, Aquarius Platinum, Boral, Commonwealth Bank, Computershare, CSL, Domino’s Pizza, OZ Minerals, Stockland, Skycity, and Suncorp.
Companies reporting on Thursday include ASX, Goodman Group, Mirvac, Mesoblast, Paladin, Rio Tinto, Transurban, Tassal Group, and Warrnambool Cheese and Butter Factory.
And on Friday look for results from Automotive Holdings, GBST Holdings, Newcrest, and Sims Metal. In the US some big companies are down to report outside media – Coca Cola, PepsiCo, Twitter, KKR, Kellogs, Cisco and AIG. Watch for the impact of the stronger dollar on many of these,especially Coke and Pepsi.
Media groups reporting include 21st Century Fox and Disney tomorrow morning, Time Warner and Time Inc later in the week.
The AMP’s Dr Oliver said at the weekend that so far the US December quarter earnings reporting season is about 63% complete.
"While 77% of results have beat on earnings, the size of positive surprises has been lower than in prior quarters and so earnings are still down 5.6% year on year. Sales revenue is down 4%, but up 0.9% if energy is excluded,” he wrote in a note to clients.
