Feature Stories | Sep 02 2014
Download related file: FNArena-Reporting-Season-Monitor-08-14
With the August result season now complete in 2014, the FNArena Result Season Monitor, which has been building throughout the month, is now complete and published here in its final form (see attached Excel file).
The table contains ratings and consensus target price changes along with brief summaries of the collective responses from FNArena database brokers for each individual corporate result, and an assessment of “beats” and “misses”. Australian corporate results tend to focus on the profit line, with all its inherent potential for accounting vagaries, tax changes, asset write-downs and other “one-off” impacts. FNArena has focused mostly on underlying earnings results (more in line with Wall Street practice) as a more valuable indicator of whether or not a company has outperformed or underperformed broker expectations. There is also a level of “quality” assessment here rather than simple blind “quantity”.
The Monitor summarises results from 269 major listed companies. By FNArena’s assessment, 81 companies beat expectations and 71 missed expectations, for a percentage ratio of 30/26 or 1.14 beats to misses. The simple average of all resultant target price changes came in at a net 2.1% gain. In response to results, brokers made 55 ratings upgrades and 90 ratings downgrades.
As an aside, the ASX 200 closed on July 31 at 5632 and closed on August 29 at 5629, a negligible change. Notwithstanding macro influences over the period, this lack of movement reflects an earnings season which largely met expectations. It was the first season since the GFC to feature a notable increase in net corporate earnings, but given the market had already pushed up PE multiples in anticipation of such an increase, the results season simply justified net valuation, nothing more or less.
Disclaimer:
While FNArena's Reporting Season Monitor is being compiled with great care and our best endeavours, investors should note that we cannot guarantee that all data and information gathered and on display is 100% accurate at all times. FNArena does not accept any responsibility for errors and omissions that can occur. Investors should always do their own research and consult with a financial expert before making investment decisions. FNArena's Reporting Season Monitor is an informative tool, it does not not contain investment advice and should not be treated as such.
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