The Australian December half profits reporting season is now all but over with only the rats and mice to release their reports today and tonight.
And even though companies have gotten an extra day to report, thanks to the leap year, many won’t release until late into the evening or tomorrow morning. Anything to hide the red ink and confirmation that the companies are zombies.
Their results will be so bad that they will try and ‘hide’ among the 100 or more other reports to be issued today and tonight, mostly from small miners and industrials.
Today we will be lucky to see a big profit announced amid the acres of red ink.
Offshore there are one or two reports of interest, especially the preliminary full year figures from Glencore tomorrow night our time which will be full of red ink from asset write-downs as well.
Barclays, the big UK bank reports its full year results tomorrow night, while WPP the global advertising giant releases its figures on Friday night, our time.
The AMP’s Chief Economist, Dr Shane Oliver does a regular examination of the Australian interim and full year reports and he said at the weekend that “overall results were much better than feared.”
Dr Oliver said that some “7% of results have bettered expectations (against a norm of 44%) with only 21% coming in worse than expected (against a norm of 25%), 66% have seen profits up on a year ago and 64% have raised their dividends (against a norm of 62%).”
“It’s tough out there for resources stocks but no more than expected,” Dr Oliver wrote.
Two resource company results stood out – OZ Minerals, which added a bonus to the higher dividend on Friday with news of a $60 million buyback to soften the blow of a $800 million decision to start a new mine in outback South Australia on its own and not with partners, as expected.
Mineral Resources was another which had a profit rise and unchanged final dividend, a good outcome given the weakness in metal prices.
“Meanwhile, most of the big banks are seeing reasonable results and stocks exposed to the Australian economy, led by housing and the consumer, are doing well,” according to Dr Oliver.
“The better than feared nature of the results to date has been reflected in 64% of stocks seeing their share price outperform the market the day results were released.
"Overall profits are on track to fall around 5% this financial year but this is due to a 65% slump in resources profits. Outside of resources, profits are rising by around 5%,” he pointed out.
We still have a number of key results to come for companies which balanced at the end of January – Myer, Kathmandu, Soul Patts, Brickworks, TPG Telecom, New Hope, Rural Co, OrotonGroup and Premier Investments.
Friday was the latest day for serious companies, and it was dominated by the weak result from Woolworths which triggered wild swings in the price of its shares.
Woolies was originally sold down 6.4% on its weak interim earnings report and the huge Masters losses of $3.2 billion, before swinging up as much as 4.5% and ending the day up 2.1%.
Friday’s best was Breville Group, up 12% (after a solid profit announcement on Thursday) and the worst was Super Retail Group, which slumped 17% after releasing unimpressive half year earnings, especially in its weak leisure business.
One laggard that is expected to report today is embattled legal services group, Slater and Gordon. Hefty write downs in the UK are expected – possibly in the hundreds of millions of dollars. The company asked for the shares to be suspended last Wednesday, as well as pushing back the release of the interim figures until today. The company also delayed the release of the full year figures last August.
