Earnings season tracking well

Earnings season is tracking in line with expectations, says Mac Bank:

We analyse the Dec HY13/1H14 Australian profit reporting season to date with 41 companies having reported profit results by COB 13 Feb, representing 17% of companies to report by number (35% by market cap).

• Macquarie’s aggregated All Companies FY14 EPSg (Jun pro-rated) forecast lifted back to +13.1% (+0.2ppts) this week driven by Banks (+1.0ppt to +8.3%) with CBA & ANZ upgraded on an improved impairment outlook. Industrials FY14 EPSg is now +4.8% (-0.4ppt this week) following a week of mixed earnings results (+ve results from NWS, CPU, SGH, DMP offset by BKN, FOX & COH earnings misses), while an accounting standard change driven downgrade to TLS accounts for half this slippage. Resources FY14 EPSgforecast fell 0.5ppt to +44.3% following downward revisions to RIO’s forecast which was partly offset by +ve pre-result forecast adjustments to BHP & FMG. LPTs EPSg is largely unchanged +5.3% (+0.1ppts) with results broadly in line.
• Notably post this week’s slippage Industrials EPSg forecast (+4.8%) is now only just above that delivered in FY13 (+4.6%) and surprisingly a higher net interest expense has been a key driver. Revenue growth expectations however have lifted with FY14 revenue forecast +4.6% vs +4.4% previously.
• A large number of companies have this reporting season to date upgraded or maintained earnings guidance (CPU, DMP, ANZ, CSL, SGH, CRZ, TCL, TLS & MIN), and have outweighed those to have downgraded guidance, or have a big 2H to deliver (FOX, ASX, GFF, COH, PRY & SKE).
• Another standout aspect of this reporting season to date is dividends which continued to positive surprise with 12 out of 41 companies beating MRE’s prereporting season forecast by > +5% from. This week we saw RIO, BKN, SGH, OZL & MCR all delivering better-than-expected dividends.

It’s about bloody time the analysts got it right, just quietly.