The February company reporting season is about 80% complete and results so far have been “quite decent”, according to UBS.
As part of their analysis, UBS equity strategists David Cassidy and Jim Xu highlighted which companies had made the biggest changes — both good and bad — to their earnings forecasts, compared to the previous reporting season in August.
After all, reporting season isn’t just to show how much profit each company made. Markets also asses how those profits compared to analyst expectations — and perhaps more importantly, how the company thinks it will do in the future.
Here are the best and worst performers:
The UBS list highlights the top 10 companies which now have a sunnier outlook, offset by the bottom 10 with the most downbeat earnings revisions.
Cassidy and Xu said most companies have held steady on their profit guidance for the next two financial years — which is a somewhat rare occurrence.
However, “while marginally better than ‘normal’, Australian earnings continue to lag the global uptrend, in terms of both the rate of earnings growth and the rate of earnings revisions,” the pair said.
Fortescue led the way among companies with more optimistic forecasts. The company also beat half-year profit expectations, although its announcement of a smaller dividend weighed on its share price when it reported earnings on Wednesday.
And infant formula maker A2 Milk also upgraded its guidance for the 2018 financial year by almost 15% — after also smashing profit expectations, which saw its share price rocket higher on reporting day.
Among the worst performers, Suncorp Bank and education provider Vocus Group both downgraded their earnings outlook by around 8%.
Suncorp shares slumped by 2.3% on earnings day, while Vocus fell by more than 10% and finished the week around 14% lower.