Friday saw some untidy results to end the earnings season, from Harvey Norman; 16% slide in profit and surprise $163 million deeply discounted rights issue (a discount of 33%) to the massive $403 million dollar impairment and net loss of nearly $307 million.
Both were among the big surprises of the June 30 reporting season – RFG for the size of the write down, Harvey Norman for the rushed announcement of the new capital raising – and 50% boost in final dividend to 18 cents a share from 12 cents the year before.
Dividends are up faster than earnings – around 13% against 8% with the overwhelming majority of the 170 or so companies to report in the June 30 period lifting payouts, some including special one off payments.
The AMP’s Chief Economist, Dr Shane Oliver says results in the reporting season have been solid.
“It’s not the 28% earnings growth being seen in the US but it’s still solid.
“44% of results have surprised on the upside which is in line with the long term norm, the breadth of profit increases was impressive with 77% reporting higher profits than a year ago which is the strongest since before the GFC and compares to a norm of 66%, 86% have increased their dividends or held them constant and 62% of companies have seen their share price outperform the market on the day results were released.
“2017-18 earnings growth have come in around expectations at about 8%, with resources earnings up 25% thanks to solid commodity prices and rising volumes and the rest of the market seeing profit growth of around 5%,” according to Dr Oliver.
Source: AMP Capital
