Via UBS:
More beats than misses, guidance and earnings revisions less negative
110 ASX 200 stocks have reported, while 63 ASX 100 stocks have reported (out of 86 due to report). Price reactions to results have been largely positive, with EPS beats being rewarded, but EPS misses not being punished (Figure7). More stocks have beat than missed and guidance has turned less negative. The average Industrials ex-Financial stock that missed / beat on guidance outperformed by -5.1% / +5.0% respectively (Figure8).Better than expected top-line and cash flows, but cost performance weak
A key upside surprise has been to revenue, with a net 13% of stocks reporting top-line beats. Beats to revenue also boosted cash flows, with a net 25% of stocks reporting better than expected cash flow. However, strong cash conversion was partly driven by lower inventories which could reverse if sales stay robust and companies re-stock. While trends on cost were initially positive, costs have been higher than expected, with a number of stocks noting COVID costs are likely to remain high through FY21. Growth has continued outperforming, with PE dispersions at a record high (Figure15).