The Australian December half earnings (and odd full year) reporting season ramps up this week just as the US December quarter season starts easing off.
Here there are 46 major ASX 200 companies due to report including the Commonwealth Bank, CSL Suncorp, JB HiFi, Telstra, IAG and AMP.
Weak results are already expected from AMP, Suncorp (watch the performance of its insurers, especially in connection with the bushfires) IAG it has already downgraded earnings forecasts), Telstra and Woodside.
Others due to report include a full year result from GPT today, interim from Transurban tomorrow, Woodside later in the week, Downer EDI (a lower result has already been forecast), Challenger, Bapcor, HT&E, Magellan, South 32, Treasury Wine Estates (a weak result has already been flagged), Orora, Breville, carsales.com.au, Bendigo and Adelaide Bank and Northern Star Resources.
The three results to watch are of course the Commonwealth’s interim and will it take the risk and lift dividend after surviving the fallout of the Hayne Royal Commission and crackdown by regulators.
CSL’s interim and its comments on the coronavirus in China are eagerly awaited.
The company has already forecast a higher result and the share price has reflected that with a series of new highs in recent months. Investors want to know if it’s getting into the coronavirus vaccine story.
And JB Hi Fi’s interim will tell us how well the consumer electronics and whitegoods sectors did amid a slowdown in retail sales and the collapse of a number of chains in department stores, fashion, and clothing.
JB Hi Fi’s shares have also hit a number of all-time highs recently and the results will have to be solid to justify that pricing, along with the outlook for the rest of the year.
The AMP’s chief economist, Dr. Shane Oliver says “earnings growth is expected to be running around 2-3% led by tech, telco, gaming, health care, and consumer staple stocks, with resources earnings up around 3.5% but banks lagging with just 1% earnings growth.’
“Key themes are expected to be a fall in dividends and company comments around the bushfires and coronavirus,” he wrote in a weekend wrap up of the markets.
In the US the pace of reporting slows noticeably with Cisco, Pepsi, ViacomCBS, Deere and Co, Loews, Hilton Worldwide and Hyatt Hotels the standouts reporting.
As well reports are due from MGM Resorts, Expedia, TripAdvisor, Under Armour, Denny’s, Newell Brands and Marathon Oil.
US investors will be looking to see if these and other companies make any mention of the impact of the coronavirus on sales or if there is a mention in outlook commentary for the early months of 2020.
In recent weeks KFC licensee Yum China warned that it could report an operating loss in the first quarter and take a significant hit to sales and productivity due to the coronavirus outbreak after it was forced to shut nearly a third of its stores in China.
Apple has already shut its stores for a week and Starbucks said last week it would delay a planned upward revision to its outlook for the year and expected a material but temporary financial hit.
Deer and Co, which reports this week, has already shut its China factories. Airlines have cut services or stopped flying to China altogether.
With casinos in Macau closed and others around the world feeling the pain, MGM Resorts comments will be watched closely for the impact of the virus.
