Broking analysts were decidedly nervous in the lead up to the latest profit reporting season. A series of corporate confessions during the late 2008 resulted in sharp earnings downgrades during December and January as the impact of the global credit crunch became more obvious.
Yet the news was not as bad as many feared. For the 213 companies in our sample, sales were up 8.3%, net profit margins remained healthy at 7.8% and roughly half either maintained or increased their dividends.
|
Corporate Earnings Results
Dec 2008 v Dec 2007 |
||
| Six months to: |
2008
|
2007
|
| Number of companies in sample |
213
|
191
|
| Median sales growth (%) |
8.3
|
14.2
|
| Median pre-tax profit growth (%) |
-12.3
|
13.9
|
| Median net profit growth (%) |
-34.1
|
9.7
|
| Median EPS growth (%) |
-30.1
|
6.8
|
| Median net margin (%) |
7.8
|
10.0
|
| Median dividend yield (%) |
6.4
|
4.1
|
| Average share price reaction (%) |
-1.32
|
0.72
|
The reaction of share investors was generally better than expected as well with almost as many stocks rising as falling on the day of their profit announcement.
However large asset write-downs resulted in some spectacular corporate losses, notably by News Corporation (ASX:NWS), GPT Group (ASX:GPT), OZ Minerals (ASX:OZL) and Centro Properties Group (ASX:CNP).
As a result, the latest reporting season has the dubious honour of providing nearly one-third of the top fifty losses in Australian corporate history.