We analyse the Jun HY13/FY13 Australian profit reporting season to date. It is still early in this reporting season with only 11 companies having reported profit results (as at COB 8 Aug) representing 6% of companies to report by number and 10% by market cap.
Impact
Macquarie‟s aggregated All Companies FY13 EPSg (Jun pro-rated) forecast remains largely unchanged at -2.6% at this early stage of the reporting season. Similarly, there is little change in the forecasts for the key sectors with some slippage in Industrial‟s FY13 forecast down 0.6ppt to +4.3%, although this largely reflects the recent ORI downgrade rather any earnings miss.
Clearly investors have FY14 forecasts firmly in focus. We note Macquarie‟s All Companies FY14E EPSg at +14.7% is +1.3ppts higher than our 15 –July estimate with this small upgrade reflecting a +5ppt uplift in Resource FY14E EPSg forecast to +35.5%.
The most notable development so far this reporting season is of the 11 that have reported to date, MRE has upgraded the FY14 EPS forecasts of 6 and 3 have forecasts unchanged (IRE +11.1%,TCL +4.2%, NVT +3.8%, TLS +3.2%, DOW +3.0%, & COH +2.8% with RIO, FOX and RMD largely unchanged).
The all important earnings revision ratio for the Market however remains firmly below 1.0x at this week‟s close (0.7x) but we note has been trending higher in the last few months (0.45x in mid-June). We also note the uplift in the Resource revisions ratio over this period from 0.3x to current also 0.7x.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
