The Australian December half profit reporting season hits its peak this week with nearly 100 major companies reporting over the next five days.
Exoect to hear from BHP Billiton, APN, IAG, Woolworths, Qantas, Worley Parsons, Seven Group Holdings, Southern Cross Austereo, Fairfax Media, Prime Media, Nine Entertainment, OZ Minerals (full year), Kogan, Northern Star, Independence Group, Caltex Australia (full year), Scentre and Westfield (both full years).
Others reporting include Monadelpheous, Fletcher Building, Brambles, Perpetual, Aconex, Bega Cheese, GWA, Stockland, Woodside, Blackmores, Breville Group, Crown Resorts, Flight Centre, Webjet, Automotive Holdings, Bradken (loss), Coca Cola Amatil, The Reject Shop, Adelaide Brighton (Full year), Ardent Leisure, Super Retail Group and Beacon Lighting.
BHP’s results tomorrow will confirm that resource company profits are on track to more than double, as did those from Rio Tinto, Evolution Mining and Santos and Whitehaven coal on Friday. OZ Minerals will produce solid full year figures later in the week as well, while Woodside should be a little better as oil prices rose in the final quarter.
But profit growth across the rest of the market is likely to be around 5%, according to the AMP’s chief economist, Dr Shane Oliver.
He says the key themes are a massive turnaround for resources companies, constrained revenue growth for banks (as the CBA showed midweek, but not the ANZ which surprised on the upside with its first quarter update on Friday) and industrials; and an ongoing focus on dividends (as we saw for example, with Seven West Media halving interim to 2 cents a share on the back of a 91% slump in profit, and Primary Healthcare cutting its dividend to 4.8 cents from 5.6 cents a share after its shock profit slump).
The results from Woolworths (will it do better than rival Coles?) on Wednesday and Qantas on Thursday will also be vital for market sentiment.
But results from the media sector are proving to be weaker than expected in many cases (Seven West Media, Ten, News Corp).
As of Friday, Dr Oliver says we are now a bit over 40% through the Australian December half profit reporting season.
“As is often the case after an initial flurry of good results we have seen a few more misses over the last week,” he wrote at the weekend.
“But so far the overall results remain good. 53% of companies to report so far have exceeded earnings expectations compared to a norm of 44%, 70% of companies have seen profits up from a year ago and 69% have increased their dividends from a year ago (see graphics in this story).
“But reflecting the strong rally in the market in anticipation of the results only 44% have seen their share price outperform the market on the day they reported as a lot of good news was already priced in.
“Resource profits are on track to more than double this financial year and this is driving a return to overall profit growth for the market.”
