The Australian December 31 earnings season picks up pace this week.
Already we have seen mixed figures from listed invest companies like Milton Corporation, Amcil and Australian Foundation, with the latter two going off banks, especially Westpac and the Commonwealth.
GUD Holdings surprised last week with unexpected losses in two divisions – its shares were naturally sold off. But the company is maintaining interim dividend.
On Friday ERA Ltd produced a big loss (not unexpected) for the 2015 financial year of $275 million full-year loss, after it shelved a major mine expansion last year.
ERA’s 2015 loss is significantly larger than the $188 million loss reported in 2014, and is due mainly to a $197 million write-down during the first half, related to the mine decision.
Late today, earnings results are expected from Argo Investments, the second ranking listed investment company after AFIC.
On Thursday, earnings include those from Downer EDI, and Tabcorp, while Macquarie Group is set to issue a trading update.
And on Friday, earnings are expected from News Corp and its majority owned subsidiary, REA Group and Whitehaven Coal.
AMP chief economist, Dr Shane Oliver says the key themes for this reporting season “are likely to be: (the) ongoing horrific conditions for resources companies (where 2015-16 earnings are expected to fall another 52%); continued reasonable profit growth for the rest of the market (of around 6%) led by healthcare, building materials, general industrials and discretionary retail; and an ongoing focus on cost control.
“Given the significant downwards revision to earnings expectations (-5% over the last 3 months) and the fall in the share market so far this year which has taken it to a slightly below average PE there is some chance we will see upside surprise,” he wrote at the weekend.
