CORPORATE PROFITS – AUSTRALIA

Small caps tipped to lift tough reporting season

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 13 & 22 : 1-Feb-16

The consensus of analysts is that the Australian sharemarket’s earnings per share will decline by six per cent in the February 2016 reporting season. However, a 45.5 per cent fall in earnings per share is forecast for the resources sector. Donald Williams of Platypus Asset Management is bearish about the outlook for the sector, warning that commodity prices are unlikely to rebound for several years. Meanwhile, Morgan Stanley expects stocks outside the top 20 to perform the best.

CORPORATES
PLATYPUS ASSET MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, BENNELONG AUSTRALIAN EQUITY PARTNERS PTY LTD, BHP BILLITON LIMITED – ASX BHP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, AMCOR LIMITED – ASX AMC, ANSELL LIMITED – ASX ANN, MACQUARIE GROUP LIMITED – ASX MQG, COCA-COLA AMATIL LIMITED – ASX CCL, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, MANTRA GROUP LIMITED – ASX MTR, AVEO GROUP – ASX AOG, BURSON GROUP LIMITED – ASX BAP, CSG LIMITED – ASX CSV, TELSTRA CORPORATION LIMITED – ASX TLS, TABCORP HOLDINGS LIMITED – ASX TAH, REA GROUP LIMITED – ASX REA, GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED – ASX GMA, UNITED STATES. FEDERAL RESERVE BOARD

AFIC hunts for quality mid-cap investments

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Original article by Ruth Liew
The Australian Financial Review – Page: 17 : 21-Jan-16

The Australian Foundation Investment Company has posted a 2015-16 interim profit of $A145.5m, which is 10.3 per cent higher than previously. The listed investment company’s revenue was 7.2 per cent higher at $A156.6m, although its investment portfolio generated a loss of 1.3 per cent for the half-year. The group has reduced its exposure to large banks and retailers, and increased its holdings of stocks such as Qube Holdings, Suncorp Group and Treasury Wine Estates.

CORPORATES
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, QUBE HOLDINGS LIMITED – ASX QUB, SUNCORP GROUP LIMITED – ASX SUN, TREASURY WINE ESTATES LIMITED – ASX TWE, HEALTHSCOPE LIMITED – ASX HSO, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, WESFARMERS LIMITED – ASX WES, WOOLWORTHS LIMITED – ASX WOW, CHALLENGER LIMITED – ASX CGF, MACQUARIE GROUP LIMITED – ASX MQG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MAINFREIGHT LIMITED, INTEGRAL DIAGNOSTICS LIMITED – ASX IDX, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, OIL SEARCH LIMITED – ASX OSH, SANTOS LIMITED – ASX STO, STANDARD AND POOR’S ASX 200 ACCUMULATION INDEX, UNITED STATES. FEDERAL RESERVE BOARD

Ratings agency predicts weaker bank profit growth in 2016

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Original article by Clancy Yeates
The Australian Financial Review – Page: 17 : 20-Jan-16

Fitch Ratings warns that Australian banks are likely to face lower growth in earnings in 2016, citing factors such as a rise in bad loans, an increase in the cost of funding and stronger competition in the sector. However, the ratings agency notes that capital raisings in 2015 mean the four major banks are well-placed to handle any increase in bad loans.

CORPORATES
FITCH RATINGS LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, RESERVE BANK OF AUSTRALIA

Oil price drop to fuel Qantas profit

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Original article by Jamie Freed
The Australian Financial Review – Page: 15 : 11-Jan-16

Paul Butler of Credit Suisse says the sharp decline in the price of Brent crude oil and jet fuel in recent months should boost the earnings of Qantas over the next two years. Shareholders at the carrier’s 2015 annual meeting were told that its fuel bill for 2015-16 will be around $A3.61bn, but Butler forecasts that this could potentially fall by around $A110m. He adds that hedging could allow Qantas to slash its fuel costs by another $A160m in 2016-17.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, CREDIT SUISSE (AUSTRALIA) LIMITED, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, STANDARD AND POOR’S CORPORATION, MERRILL LYNCH (AUSTRALIA) PTY LTD, DEUTSCHE BANK AG

Costco profit surges as sales exceed $1b

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 21-Dec-15

Costco Wholesale Australia has posted a pre-tax profit of $A22.7m for the year ended August 2015, following a loss of $A10.7m previously. The grocery retailer’s revenue rose from $A878.5m to $A1.323bn, while its gross margin increased from 14.3 per cent to 14.6 per cent. IBISWorld estimates that Costco now boasts about 1.2 per cent of Australia’s grocery market, six years after opening its first Australian store.

CORPORATES
COSTCO WHOLESALE AUSTRALIA PTY LTD, IBISWORLD PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, MYER HOLDINGS LIMITED – ASX MYR, DAVID JONES LIMITED, COSTCO WHOLESALE CORPORATION

BHP should slash dividend by half: analyst

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Original article by James Thomson
The Australian Financial Review – Page: 16 : 17-Dec-15

Paul McTaggart of Credit Suisse says BHP Billiton should drop its commitment to a progressive dividend policy and reduce its annual payment of $US1.24 per share by 50 per cent. Credit Suisse recently downgraded its earnings forecasts for BHP in both 2015-16 and 2016-17, and McTaggart says the lower earnings outlook means BHP cannot afford to keep its dividend payout at the current level.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED

Domino’s soars on European deals

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 & 18 : 17-Dec-15

Australian-listed Domino’s Pizza Enterprises now expects 30 per cent growth in its 2016 underlying EBITDA and net profits. The group had only recently upgraded its earnings guidance to 25 per cent growth. It will also acquire German pizza chain Joey’s via a joint venture with UK-based Domino’s Pizza Group. Meanwhile, Domino’s Pizza Enterprises has secured long-term extensions to its master franchise rights to the Domino’s brand in several European countries.

CORPORATES
DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, DOMINO’S PIZZA GROUP PLC, DOMINO’S PIZZA INCORPORATED, JOEY’S PIZZA, PLATYPUS ASSET MANAGEMENT PTY LTD, PIZZA SPRINT

Qantas shares bumper profit with investors

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Original article by Jamie Freed
The Australian Financial Review – Page: 13 & 18 : 16-Dec-15

Qantas expects a 2015-16 interim underlying pre-tax profit of $A875m to $A925m, compared with $A367m for the previous corresponding period. The airline has benefited from factors such as lower fuel prices, higher revenue and cost reductions in the current half-year. CEO Allan Joyce has signalled that Qantas will look at returning surplus cash to shareholders in the next several years, while Matthew Spence of Merrill Lynch expects the carrier to launch a share buyback with the release of its half-year accounts.

CORPORATES
QANTAS AIRWAYS LIMITED – ASX QAN, MERRILL LYNCH (AUSTRALIA) PTY LTD, JETSTAR AIRLINES PTY LTD, VIRGIN AUSTRALIA HOLDINGS LIMITED – ASX VAH, WOOLWORTHS LIMITED – ASX WOW, BP AUSTRALIA LIMITED

AGM downgrades but growth likely

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Original article by Vanessa Desloires
The Australian Financial Review – Page: 27 : 24-Nov-15

Analysis by Citigroup shows that 36 Australian-listed companies have upgraded their earnings guidance during the 2015 AGM season, and 42 have issued downgrades. Citigroup’s Tony Brennan notes that earnings-per-share forecasts have been reduced by about one per cent overall. Citigroup now expects the benchmark S&P/ASX 200 to be trading at 5,900 points at the end of 2016, compared with its previous forecast of 6,200.

CORPORATES
CITIGROUP PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN

James Hardie guns for US as profit slips

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Original article by Tim Binsted
The Australian Financial Review – Page: 24 : 20-Nov-15

James Hardie Industries has reported $US65.3 million ($A92 million) in adjusted profit for the second quarter of 2015-16. The Australian-listed building products supplier stated on 19 November 2015 that its full-year profit will be lower than previously forecast. The company now expects adjusted profit for 2015-16 to be between $US230 million and $US250 million.

CORPORATES
JAMES HARDIE INDUSTRIES PLC – ASX JHX