Earnings

ASX reporting season: February 2021

Get the latest updates on the major ASX stocks reporting in February 2021. Annual earning reports can help traders and investors gauge a company's outlook and share price prospects.

1 MARCH 2021

The last day of February signals the end of the half-year company reporting season. 191 of the top 200 companies unveiled half or full year results that showed a very tough operating environment. Averaged across those companies, sales fell 2% and profits fell by 8.5%.

There were huge variations across sectors. Healthcare stocks saw a solid bounce back to profit over the six months, and basic materials and industrial stocks began a recovery from the damage of the initial Covid impacts. However many sectors went backward, led by energy, consumer goods and utilities.

However, the huge gains in the market since the March lows mean that investors remain focused on the year ahead. Unfortunately many leadership teams declined to express their view, providing no guidance. Those that attempted to describe the near future were mainly cautious. This lead to investors to punish some of the more negative outlooks (see Coles), creating further incentives for management to say little about the future.

That’s it for H2 2020 reports. While many individual stocks are potentially more attractive after their reporting to shareholders, the recent ructions in the bond market are a reminder to investors and traders to keep an eye on the macro, as well as the micro.

26 FEBRUARY 2021

The season is now drawing to a close. 188 of the top 200 stocks have reported to shareholders, and the best sectors for sales and earnings growth are Basic Materials, Healthcare and Technology. On Monday, we’ll wrap our coverage for this Australian company reporting season.

This morning online retailer Kogan (EPS $0.22, f/c $0.29) missed earnings forecasts, although the company declared its highest ever dividend. In contrast, boat builder Austal (EPS $0.15, f/c $0.12) came in ahead of forecasts with a 29% lift in profits. Lynas (EPS $0.05) lifted earnings by 82%, although the US expansion underway is a company transforming deal, making this result less important.

Monday: Resolute Mining (EPS $0.01)

25 FEBRUARY 2021

Twenty top Australian companies are due to deliver earnings reports today. The dual listed A2 Milk (EPS $0.16, f/c $0.17) is trading down 16% in New Zealand after a 35% decline in earnings as sales to China stall.

Qantas (EPS -$0.57, f/c -$0.40) and Flight Centre (EPS -$1.17, f/c -$0.23) have both posted much larger than forecast losses. Investors may see this as a “clearing of the decks” after the worst year ever for both companies, and their significantly lower share prices may see a bounce today.

The Buy Now Pay Later sector is in focus. Afterpay (EPS -$0.27, f/c $0.06) announced a consensus defying loss of $77 million and a $1.25 billion capital raising. The stock is in suspense while the company beds down the issue of convertible notes. The loss surprised analysts, who were banking on the pandemic driven move to online retail to lift the company to its first profit. Customer numbers and the increase in the value of transactions financed were impressive.

Zip Co (EPS -$0.96) lost $140 million, significantly more than forecast, potentially offset by a 130% increase in revenues. The expansion into the US also drove a 217% increase in customers.

Tomorrow: Kogan (EPS f/c $0.29), Lynas, Austal (EPS f/c $0.12).

24 FEBRUARY 2021

Woolworths’ (EPS $0.91, f/c $0.84) shares are trading higher after the retailer announced an 11% lift in revenues for the first half year, which led to a 28% lift in net profits.

Earnings misses from tech stocks is an emerging theme this morning. Appen (EPS $0.42, f/c $0.50) and Nanosonics (EPS $0.00, f/c $0.02) are both trading lower after disappointing shareholders by reporting slower profit growth than expected. The exception is Wisetech (EPS $0.14) which ripped 9% higher after revealing a 43% lift in first half profit.

Perhaps surprisingly, Japara Healthcare reported a $9.5 million loss despite a 3%+ lift in revenues. Management cited pandemic effects. Blackmore’s (EPS $0.70, f/c $0.77) shares are trading higher despite a disappointing headline profit. Shareholders appeared to take comfort from the 8% growth in underlying profit.

Tomorrow: Qantas, Flight Centre, Afterpay, Zip Co, Iluka, Link and Mesoblast

23 FEBRUARY 2021

Seek shares are trading lower after the new CEO, Ian Narev (ex-CBA) announced a review of the business, that will include the selling down its stake in the controversial Zhaophin portal. The underlying profit of around $100 million was reduced by a $55 million hit on the value of its early stage ventures. The company may raise funds to ease balance sheet pressures.

Building materials group Adbri (EPS $0.14, f/c $0.16) doubled its net profit on the back of a 33% increase in revenue in 2020. Despite refusing to give guidance, its shares traded more than 8% higher this morning as shareholders contemplated the benefits of earlier cost cutting programs.

Spark Infrastructure (EPS $0.06, f/c $0.05) may be a victim of bad timing. Its 8% lift in underlying profit translated to a 33% increase in net profit, but its shares are trading lower this morning after interest rate sensitive stocks were hit in overnight trading.

22 FEBRUARY 2021

Seventy of Australia’s top companies will report to shareholders this week. Local tech leaders Wisetech and Appen (EPS forecast $0.50) will share the impact of Covid on their businesses. Outlook statements from important recovery stocks like Qantas (EPS forecast -$0.40), Sydney Airports (EPS forecast -$0.10) and Flight Centre (EPS forecast -$0.23), are a likely point of focus, and the red hot Buy Now Pay Later sector will have a chance to justify their stunning share price gains when Afterpay (EPS forecast $0.06) and Z1P Money unveil their earnings

This morning, plumbing supplies group Reliance Worldwide (EPS $0.13, f/c $0.12) and Costa Food Group (EPS $0.15, f/c $0.12) have reported ahead of Bloomberg consensus forecasts, and could receive support in trading today. On the other hand, Bluescope Steel (EPS $0.64, f/c $0.66), NIB (EPS $0.14, f/c $0.16) and Lend Lease (EPS $0.28, f/c $0.31) have fallen short, and Bingo Waste Industries (EPS $0.02, f/c $0.02) reported a smaller Covid impact than expected.

Tomorrow: Seek (EPS forecast $0.08), Adbri (EPS forecast $0.16), Spark Infrastructure (EPS forecast $0.05), Bega Cheese, Oilsearch (EPS forecast -$0.01).

19 FEBRUARY 2021

Cochlear is today’s top reporter, trading more than 7% higher after telling shareholders it is resuming dividend payments with a $1.15 interim payout (previous interim $1.60, no 2020 final dividend). The hearing implant manufacturer will lift its payout ratio towards 70% as conditions continue to improve. Goodman Group is also trading higher after it lifted its guidance to 12% growth this year – surprisingly high for an industrial property owner.

QBE share are under pressure after the company reported a loss of $863 million, and declined to resume dividend payments or provide guidance for the year ahead. Cleanaway is also trading lower after a 75% lift in profits saw only a modest increase in the dividend to 2.25 cents per share.

Monday: Bluescope Steel, Costa Group, Chorus NZ, Lend Lease and Bingo Waste Industries

18 FEBRUARY 2021

Another huge day for reports. Biotech giant CSL (EPS $3.98, f/c $3.15) shares are trading higher after the company revealed a 46% increase on profit after a 19% lift in sales. NZ casino operator SkyCity (EPS $0.10, f/c $0.05), is a top performer, up almost 5%. Although profit fell 76%, the company maintained its guidance and appointed a new CFO. Sonic Healthcare (EPS $1.42, f/c $1.18),  is also higher after doubling net profit on the back of Covid testing.

Other solid reports include Seven Group (EPS $0.73, f/c $0.68), Abacus Property (EPS $0.23, f/c $0.08) and Star Entertainment (EPS $0.05, f/c $0.04).

Wesfarmers (EPS $1.23, f/c $1.14) share fell in early trading despite a better than expected 23% lift in profits for the half. Management pointed out that growth comparisons will suffer once the Covid period starts hitting the numbers in March. A lift in the dividend to 88 cents may ease investor concerns.

There are also a number of misses today. Mining services group NRW was thumped, its shares tumbling more than 20% after the company reported a 13% slide in profits despite a 45% lift in revenues. Others to miss the mark include Woodside (EPS -$4.24, f/c $0.57) after reporting a $4 billion loss on asset write downs associated with lower energy prices. Perpetual (EPS $0.54, f/c $1.07), Coca Cola Amatil (EPS $0.25, f/c $0.48) and Crown (EPS -$0.18, f/c $0.06) may also see share price pressures.

Tomorrow: Vocus (EPS forecast $0.08), Smartgroup (EPS forecast $0.48), Cochlear (EPS forecast $0.88), QBE (EPS forecast -$0.53) and Inghams (EPS forecast $0.10) report to shareholders.

17 FEBRUARY 2021

Australian stocks that reported above forecast earnings this morning include Tabcorp (EPS $0.09, f/c $0.08), Dominos (EPS $1.10, f/c $1.04), Super Retail (EPS $0.77, f/c $0.76), Coles (EPS $0.42, f/c $0.41),  and the Netwealth (EPS $0.12, f/c $0.11) group.

Corporate Travel (EPS -$0.30, forecast -$0.10) and Webjet (EPS -$0.39, forecast -$0.17) both reported larger than estimated losses, and may give up some recent gains in trading today. The most prominent reporter today is Rio Tinto, expected to deliver its result between the Sydney close and the London opening.

Tomorrow: CSL (EPS forecast $3.13),  Fortescue (EPS forecast $1.34), Crown (EPS forecast -$0.06), Soth32 (EPS forecast $0.03), Woodside (EPS forecast $0.62), Santos (EPS forecast $0.12), Auckland International Airport (EPS forecast $0.04),  Sonic Healthcare (EPS forecast $1.18),  Star Entertainment (EPS forecast $0.04), Origen (EPS forecast $0.11) and Coco-Cola Amatil (EPS forecast $0.47).

16 FEBRUARY 2021

The world’s largest listed mining company, BHP (f/c underlying profit $6.33 bio, actual $6.03 bio), this morning revealed record levels of half-year iron ore production as prices soared. This led the board to declare BHP’s highest ever interim dividend at US $1.01 per share. Copper and energy markets also delivered positive news, offset by previously announced write downs associated with coal assets.

The miss on earnings may see early pressure on the share price. The record realised prices for iron ore have implications for Fortescue, and to a lesser extent, Rio.

Sims Metal (EPS $0.23, f/c $0.15), salmon farmer Tassal Group (EPS $0.13, f/c $0.10), appliance maker Breville (EPS $0.47, f/c $0.41), online housing advertiser Domain (EPS $0.03, f/c $0.02), ARB Corp (EPS $0.67, f/c $0.56) and medical supplier Ansell (EPS $0.83, f/c $0.82) have all delivered above consensus estimates this morning.

Brambles (EPS forecast $0.41) and GWA (EPS forecast $0.07) are also due to report today.

15 FEBRUARY 2021

JB HiFi’s 86% profit increase over the half-year is grabbing analysts’ attention this morning, although investors are more likely focussed on the similar lift in the dividend to $1.80 per share. Bulk rail goods carrier Aurizon saw profits fall 22%, although underlying earnings were steady.

Bendigo Bank reported a 67% increase in profit, an increase in tier one capital and a 1.9% lift in cash operating profits, offset slightly by a 7 basis point contraction in margin. This result could bring significant shareholder support.

Tomorrow:  BHP (EPS forecast $1.18), Brambles (EPS forecast $0.17), Tassal Group (EPS forecast $0.10) and Breville (EPS forecast $0.41).

12 FEBRUARY 2021

In Australia, after a busy week for analysts the only major company report today is Mirvac Group. The developer and real estate investor saw a 35% drop in profits for the half year. The poor news may be offset by cautiously optimistic guidance from management.

11 FEBRUARY 2021

Australian investors have a lot to consider this morning. Newcrest mining (EPS $0.68, forecast $0.57)  doubled its profit for the half year on the back of soaring gold bullion prices, smashing analyst estimates.

Telstra (EBITDA -14.2% to $3.3 bio) surprised with a decline in earnings, and the total dividend of 8 cents per share may not save it from investor anger. Management expressed confidence that the three year simplification strategy will deliver growth beyond the NBN roll-out.

Transurban (EPS -$0.14, forecast -$0.07) declared a net loss of $419 million, and the ASX (EPS $1.25, forecast $1.22) saw a small decline in its first half net income, but still managed to exceed consensus forecasts. Magellan Financial (EPS $1.11, forecast $1.13) missed, and could see share price pressures.

AMP (EPS $0.02, forecast $0.10) continued its horror run, with a 32.7% decline in profits that was well wide of consensus forecasts. The company informed shareholders that the Ares group will not launch a whole of company bid for AMP, but continues discussion of a potential purchase of AMP Capital. AMP shares may come under severe pressure in trading today.

10 February 2021

Australia’s largest listed company, Commbank (CBA EPS $2.13, f/c $2.07) has impressed analysts with a comprehensive lift across its businesses. Deposits, and housing and business lending all bounced over the half year. Importantly, the bank increased its dividend to $1.50 per share, beating estimates of a $1.45 pay out. However the bank also increased provisioning due to Covid impacts, and the cash profit was slightly below forecasts. An balance, this is a solid result, and could bring further modest share price support.

Mineral Resources’ (EPS $2.75, f/c $2.20) report is also above estimates. Revenues are up 55%, and operating profit almost doubled. However rising expenses saw net profit slide 41%. MIN increased its dividend to $1.00

Building and engineering group Cimic (EPS $1.99, f/c $2.06) may have missed their mark. Although CIM reported a  $620 million net profit after last year’s billion dollar loss, a 20 decline in revenue due to Covid delays and management guiding to lower profits ahead saw the shares savaged at this morning’s opening.

IAG (EPS -$0.20, f/c $0.01) reported a $460 million loss on increased Covid related claims. However analyst were impressed with an increase in underlying operating profit driven by margin expansion. The share jumped 5% in early trading.

9 FEBRUARY 2021

Shares in Challenger Financial were slammed in early trading despite modest increases in revenue and statutory profit in its first half year. A fall in normalised profit, and a 46% reduction in the dividend to 9.5 cents per share could explain the reaction.  In contrast, Suncorp (EPS $0.38, forecast $0.36) shares rose by more than 5% after its announcement.

Both James Hardie (EPS $0.28, forecast $0.24) and Boral (EPS $0.09) lifted slightly in early trading after delivering increases in profits. However cautious commentary restrained enthusiasm.

Tomorrow: CBA (EPS forecast $2.07), IAG (EPS forecast $0.01), Cimic (EPS forecast $2.04), Northern Star (EPS forecast $0.29).

8 FEBRUARY 2021

Real estate investment trust Charter Hall this morning announced a 3.6% lift in operating earnings to $73.6 million, in line with expectations. Analysts predict small appliance manufacturer GUD Holdings (EPS f/c $0.34)will cut its dividend to 15 cents (previous 25 cents) when it unveils its first half result today.

Tomorrow: Challenger Group (EPS forecast $0.19), James Hardie (EPS forecast $0.24), Suncorp (EPS forecast $0.36) and Shopping Centres Australia (EPS forecast $0.06).

5 FEBRUARY 2021

Australian corporate reporting season gets into full swing next week, with releases from Commonwealth Bank, Insurance Australia Group, gold miner Northern Star, builder Cimic and toll road operator Transurban, among many others. This morning, News Corp (EPS $0.34, forecast $0.11) and its partly owned subsidiary REA Group (EPS $1.32, forecast $1.27) both unveiled better than forecast earnings for the quarter and half year respectively.

Monday: GUD Holdings (EPS f/c $0.34)

4 FEBRUARY 2021

There are no top 200 company results this morning, but AGL “confessed” that at its 15 February results announcement it will write-off close to $3.6 billion in provisions for “onerous contracts” and environmental remediation, partially offset by a tax credit of around $0.9 billion. AGL shares fell more than 5% in the first half hour of trading.

Tonight: Janus Henderson (EPS forecast $2.71)

3 February 2021

Amcor (EPS $0.27, forecast $0.335) delivered a lower than expected increase in revenues and profits, but lifted its guidance to earnings growth of between 10% and 14%. The US listing of the stock rose, and Amcor shares are expected to lead the share market higher this morning. Bunnings Trust (EPS $0.22, forecast $0.09) surprised analysts with a 6% lift in profits, although a significant proportion of the increase is in unrealised valuation gains. Nonetheless, like for like rents rose 2% over the full year.

Thursday: Janus Henderson (EPS forecast $2.71)

2 February 2021

This morning, the Centuria Industrial REIT announced a 43% boost in funds from operations, and a doubling of first half revenues. The occupancy rate for its properties is at 97.7%. These stronger numbers could see investor support its units today. Although Credit Corp’s net profit increase was 10% overall, the doubling of its profits from its US foray could see its shares do even better.

Wednesday: AMCOR (EPS forecast $0.55), Bunnings Trust (EPS forecast $0.55)

1 February 2021

The Australian company reporting season gets underway this week. In most cases, companies will report for the quarter, half-year or full year ending December 31.

After a disrupted year, shareholders may look forward to a better understanding of the impact on company operations. Winners like technology based businesses and iron ore miners are under pressure to deliver earnings reports that match their stronger share price performance. On the other hand, investors may trawl through the beaten up travel and energy segments for signs of a bargain.

Banks and healthcare stocks are under scrutiny. The combined effects of the pandemic and the lowest interest rates in modern history means banks face extraordinary pressure on profit margins as they rebuild from the impact of the banking inquiry. Health providers have had a mixed outlook, with equipment manufacturers growing while service providers dealt with disruption.

Follow us here each day as we highlight key numbers and upcoming results.

Tomorrow: Credit Corp (EPS forecast $0.55) and Centuria Industrial REIT (EPS forecast $0.09)

This week: Amcor, Bunnings Trust, Janus Henderson, Newscorp, REA Group


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