The December half-year profit reporting season lines up for a big week, with BHP Billiton (BHP) reporting interim numbers on Tuesday, Woodside Petroleum (WPL) showing its full-year result on Wednesday, Fortescue Metals (FMG) and Woolworths (WOW) reporting interim results on the same day, and Ramsay Health Care (RHC) (interim) and Westfield Corporation (WFD) (full-year) stepping up to the plate on Thursday, as well as Qantas (QAN) Airways (interim result).

Other companies reporting full-year 2016 results include Caltex Australia (CTX), Scentre Group (SCG), Oil Search (OSH) and Greencross (GXL) (Tuesday); APN News & Media (APO), Coca-Cola Amatil (CCL) and IRESS (IRE) (Wednesday); Adelaide Brighton (ABC), Asaleo Care (AHY), Alumina (AWC), Macquarie Atlas Roads (MQA), MYOB (MYO), Iluka Resources (ILU), InvoCare (IVC), OZ Minerals (OZL) and Estia Health (EHE) (Thursday).

The reporting season is about 40% complete entering this week, and generally the results so far have been good. According to Shane Oliver, head of investment strategy and chief economist at AMP Capital, more than half (53%) of companies to report so far have beaten the market’s earnings expectations, compared to a norm of 44%. A further 22% of companies have matched expectations but still, on Oliver’s numbers one-quarter of companies are bringing out profit results that do not meet expectations.

Oliver says 70% of companies have lifted their profits from a year ago, while 69% have boosted their dividends. Some 17% of companies have kept the same dividend, but a problem-child minority – 14% of companies – have cut their dividends.

The market had priced in much of the good news: Oliver says this anticipation means that only 44% of reporting companies have seen their share price outperform the market on the day they reported.

Broking firm Citi says of the stocks that it covers, 23% have beaten estimates for earnings per share (EPS), and 15% have exceeded dividend forecasts. But 26% of stocks have fallen short on EPS and 13% have not matched up to dividend expectations.

This has seen Citi make slightly more EPS downgrades than upgrades: results have influenced Citi to upgrade 4% of companies reporting from ‘neutral’ to ‘buy,’ but the firm has also downgraded 6% in the other direction.

At the top line, broker Credit Suisse says companies reporting so far have delivered average revenue growth of 3.2%. Credit Suisse also sees earnings up by 6.8%, helped by cost management, and dividends up 6.8%.

The results flow has seen broker UBS lift its market EPS growth expectation for FY17 to 19.4% from 19.2%, with resources driving the charge, up 152%.

The broking house has lifted its EPS expectations for the finance stocks, from 6.5% to 6.9%, but downgraded projections for industrials, from 5.1% EPS growth to 4.7%. UBS still expects REITs to lift profits by 1%.

But while company downgrades have been surprisingly – and reassuringly – few, there have been some disappointments, as some companies come up short against high earnings growth expectations and sky-high valuations. This is particularly the case for market-favourite stocks: Domino’s Pizza (DMP) plunged 14% last week on its interim report, even though it boasted a record interim profit and record sales.

The market was concerned that the crucial same-store sales figure was losing growth momentum, and that the net profit was less than half of the $124.8 million full-year profit expected by analysts’ consensus. Add to that, revelations that the pizza chain had experienced wider issues with wages underpayment and franchisee disputes than previously known, and you had a seriously disappointed stock market.

Telstra (TLS) also underwhelmed the market with its interim result, which showed a 3.6% drop in total revenue, to $12.8 billion, and a 14.4% drop in interim net profit, to $1.8 billion. While Telstra maintained the interim dividend at 15.5 cents, the longer-term risk to the dividend is worrying the market, with analysts starting to cut their forecasts. The NBN will bring a $2 billion–$3 billion hit to Telstra’s earnings and the market is concerned at what will fill the hole: analysts expect Telstra to lose market share in mobile, and the company is also facing heightened competition in corporate fixed-line, with TPG Telecom (TPM) and Vocus (VOC) increasingly aggressive competitors.

Medibank Private (MPL) also disappointed last week, reporting a 1.9% rise in net profit, but that was driven by higher income from investments: operating profit from the health insurance business actually fell by 8%, as a net 41,000 policies lapsed: membership numbers fell by 2.3%.

Turning to this week, analysts expect big things from BHP Billiton and Fortescue, who are riding better commodity prices (especially iron ore, the latter’s sole focus). BHP will report after the market closes tomorrow: according to Bloomberg estimates, analysts expect BHP to report underlying first-half profit of $US3.4 billion–US$3.6 billion ($4.4 billion–$4.7 billion), up more than eightfold on the figure reported a year ago.

BHP’s interim dividend will also be of great interest: last year BHP slashed its interim dividend by 75% – the first dividend cut since 1988 – to 16 US cents, about half of what the market expected, after reporting its first loss in more than 16 years. The mining giant also ditched its “progressive dividend” policy, which guaranteed that dividends never fell, instead committing to a payout ratio of 50% of underlying earnings over the longer term. (Rio Tinto did much the same thing, switching to an intention to return between 40%–60% of underlying earnings.)

BHP is expected to boost dividend payments by more than 60% this year on the back of higher coal and iron ore prices: the company expects to generate free cash flow of $US7 billion ($9.1 billion) during the current year. The interim dividend will be a sign of how this expectation is tracking. On consensus, analysts expect about 42 US cents (54.5 cents), although it could come in lower if the company opts to use its cash flow boost to reduce debt. Analysts still see BHP as showing some upside, with a 4% gap between the current price and the consensus target price, according to FN Arena.

Fortescue is expected to triple its underlying first-half profit to about $US950 million ($1.2 billion) and lift its interim dividend significantly. Analysts see the stock paying a full-year dividend of about 25 US cents a share: an interim dividend of about 16.8 US cents (25.7 cents) is expected. Analysts see Fortescue as trading 5% above the consensus target price, however.

On Tuesday, Oil Search is expected to post underlying earnings of about $US100 million ($130 million), down significantly on the $US360 million ($470 million) figure of 2015. But in headline terms, the net profit of $US165 million ($214 million) will be a major improvement on the previous $US39 million loss ($50 million). Oil Search looks to be showing better comparative value than Woodside, with the FN Arena analysts’ consensus price seen as more than 13% above the current share price.

On Wednesday, Woolworths’ (WOW) half-year earnings will be most notable for the second-quarter sales numbers, which analysts expect will show like-for-like supermarket sales growth of 1.5%–1.7%. Given that Wesfarmers’ Coles reported second-quarter sales growth of 1% last week, that would mean the long-awaited move by Woolworths to sales growth ascendancy has arrived: Woollies has not beaten its arch-rival on like-for-like (same-store, that is, with store openings and closing stripped out) sales growth in a quarter for 30 quarters, or more than seven years. But FN Arena reckons Woolworths to be trading about 5% above the analysts’ consensus target price.

Woodside’s full-year result on Wednesday is expected to show a profit of about US$850 million–US$900 million ($1.1 billion–1.17 billion), but a 23% fall in the dividend, to 84 US cents ($1.09) a share, fully franked. On analysts’ consensus price target, Woodside is trading with upside of 2.4%, according to FN Arena.

This week’s reports

Tuesday

• Aconex (ACX) – interim
• BHP Billiton – interim
• Caltex Australia – full-year
  FY16 EPS change: –12.6% to 203.6 cents
  FY16 Dividend per share (DPS) change: –12.4% to 102.5 cents, fully franked
• Flexigroup (FXL) – interim
• Growthpoint Properties Australia (GOZ) – interim
• Monadelphous Group (MND) – interim
• National Storage REIT (NSR) – interim
• Independence Group (IGO) – interim
• Scentre Group (SCG) – full-year
  FY16 EPS change: +3.1% to 23.3 cents
  FY16 Dividend per share (DPS) change: +1.2% to 21.2 cents, unfranked
• Sandfire Resources (SFR) – interim
• SEEK (SEK) – interim
• St Barbara (SBM) – interim
• Virtus Health (VRT) – interim
• PropertyLink (PLG) – interim
• Senex Energy (SXY) – interim
• Greencross – full-year
  FY16 EPS change: +27.2% to 38.7 cents
  FY16 Dividend per share (DPS) change: +8.1% to 20 cents, fully franked

Wednesday

• APN News & Media (APN) – full-year
  FY16 EPS change: from –1 cent to 23.5 cents
  FY16 Dividend per share (DPS) change: from nil to 4.2 cents, unfranked
• Bluescope Steel (TES) – interim
• Blackmores (BKL) – interim
• Coca-Cola Amatil – full-year
  FY16 EPS change: +5.1% to 54.1 cents
  FY16 Dividend per share (DPS) change: +3.8% to 45.2 cents, 75% franked
• Fairfax Media (FXJ) – interim
• Fletcher Building (FBU) – interim
• Infigen Energy (IFN) – interim
• IRESS (IRE) – full-year
  FY16 EPS change: +25.8% to 44.3 cents
  FY16 Dividend per share (DPS) change: +6.3% to 45.4 cents, 60% franked
• McMillan Shakespeare (MMS) – interim
• Pact Group (PGH) – interim
• APA Group (APA) – interim
• Qube Holdings (QUB) – interim
• Resolute Mining (RSG) – interim
• Woodside Petroleum – full-year (reports in US$)
  FY16 EPS change: +3,380% to 104.4 US cents
  FY16 Dividend per share (DPS) change: –22.8% to 84.1 US cents, fully franked
• Sky Network Television (SKT) – interim (reports in NZ$)
• Stockland Property Group (SGP) – interim
• Sirtex Medical (SRX) – interim
• Steadfast Group (SDF) – interim
• Tassal Group (TGR) – interim
• Woolworths – interim
• Fortescue Metals – interim
• Insurance Australia Group (IAG) – interim
• Vocus Communications (VOC) – interim
• Healthscope (HSO) – interim

Thursday

• Adelaide Brighton (ABC) – full-year
  FY16 EPS change: –7.8% to 29.5 cents
  FY16 Dividend per share (DPS) change: +74.2% to 26.1 cents, fully franked
• Ardent Leisure (AAD) – interim
• Asaleo Care (AHY) – full-year
  FY16 EPS change: –18.6% to 10.9 cents
  FY16 Dividend per share (DPS) change: –8.3% to 9.2 cents, 20% franked
• Alumina (AWC) – full-year (reports in US$)
  FY16 EPS change: +10.6% to 3.4 US cents
  FY16 Dividend per share (DPS) change: +15.4% to 7.3 US cents, fully franked
• Crown Resorts (CWN) – interim
• Ramsay Health Care – interim
• Nine Entertainment (NEC) – interim
• Qantas Airways (QAN) – interim
• Flight Centre Travel (FLT) – interim
• Macquarie Atlas Roads – full-year
  FY16 EPS change: +55.2% to 17.7 cents
  FY16 Dividend per share (DPS) change: +14.6% to 18.3 cents, unfranked
• MYOB Group – full-year
  FY16 EPS change: +38.3% to 15.1 cents
  FY16 Dividend per share (DPS) change: +5.1% to 11 cents, unfranked
• Costa Group (CGC) – interim
• Cleanaway Waste Management (CWY) – interim
• Iluka Resources (ILU) – full-year
  FY16 EPS change: from 12.8 cents in FY15 to –7.6 cents
  FY16 Dividend per share (DPS) change: –59.5% to 10.1 cents, fully franked
• Investa Office Fund (IOF) – interim
• InvoCare (IVC) – full-year
  FY16 EPS change: –1.2% to 49.5 cents
  FY16 Dividend per share (DPS) change: +7.5% to 40.9 cents, fully franked
• Oz Minerals – full-year
  FY16 EPS change: –11.9% to 37.8 cents
  FY16 Dividend per share (DPS) change: –34.4% to 13.1 cents, unfranked
• Perpetual (PPT) – interim
• Platinum Asset Management (PTM) – interim
• TradeMe Group (TME) – interim (reports in $NZ)
• Southern Cross Media (SXL) – interim
• Estia Health (EHE) – full-year
  FY16 EPS change: +44.4% to 21.8 cents
  FY16 Dividend per share (DPS) change: –53.1% to 12 cents, fully franked
• Webjet (WEB) – interim

Friday

• Automotive Holdings (AHG) – interim
• Charter Hall Group (CHC) – interim
• Cromwell Property Group (CMW) – interim
• Mayne Pharma (MYX) – interim
• NEXT DC (NXT) – interim
• Regis Healthcare (REG) – interim
• Super Retail Group (SUL) – interim

Monday 27 February

• QBE Insurance Group (QBE) – full-year (reports in $US)
  FY16 EPS change: +5.9% to 53.3 US cents
  FY16 Dividend per share (DPS) change: –8.1% to 46 US cents, fully franked
• Amaysim Australia (AYS) – interim
• Bellamy’s Australia (BAL) – interim
• Gateway Lifestyle (GTY) – interim
• Lend Lease (LLC) – interim
• iSentia Group (ISD) – interim
• Spark Infrastructure Group (ASX) – full-year
  FY16 EPS change: +60.3% to 9.5 cents
  FY16 Dividend per share (DPS) change: +18.8% to 14.3 cents, unfranked
• Adairs (ADH) – interim
• Spotless Group (SPO) – interim

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