February Result Season 2023: The Wrap

Feature Stories | Mar 09 2023

The February result season broke FNArena’s record for the most number of earnings misses to earnings beats. What can we now look forward to?

-February verdict: misses outweigh beats
-Inflation lingers
-Banks, resources past peak
-Two-speed economy ahead?

By Greg Peel

With the February result season now complete in 2023, the FNArena Corporate Result Monitor, which has been building throughout the month, is now complete and published in its final form.


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 345 major listed companies. By FNArena’s assessment, 101 companies beat expectations and 113 missed expectations, for a percentage ratio of 29/33 or 0.9 beats to misses. The aggregate of all resultant target price changes came in at a net -0.3% reduction. In response to results, brokers made 53 ratings upgrades and 46 ratings downgrades.

The first FNArena Corporate Result Monitor was published in the August season of 2013. See table:

A Record

Only once before in the history of FNArena’s Monitor have beats failed to exceed misses, largely because it is in a company’s interest to set guidance low and beat it, rather than the other way around. Equally, it is in stock analysts’ interest to be conservative with forecasts, as being wrong to the downside is more easily forgiven than being wrong to the upside.

In August 2019, 24% of results beat expectations and 25% missed. On two occasions since August 2013 the percentages have been equal.

In February this year, 29% of results beat and 33% missed. If we pick that metric alone, it was the worst result season since our records began. The average is 33% beats to 24% misses.

But there are other metrics. The average of broker ratings upgrades following results to downgrades is 59 to 69, meaning on average more downgrades follow than upgrades. This February season saw 54 upgrades and 43 downgrades – not a record, but one of the more positive outcomes compared to history.

We do need to put that in context nevertheless.

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