Woodside, Coca-Cola, BlueScope end week up on results

Editorial director of Switzer
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Last week was another bumper week for companies reporting their interim results, but the market wasn’t too enthused by what it saw, closing down by less than a half a percent.

According to AMP chief economist Shane Oliver’s wrap up of the season so far, for the 70% of companies that have revealed all to the market, it’s been a fairly positive season.

Less than half of the companies reporting, 46 %, have exceeded expectations but that’s the best result in three years. And in good news for the SMSF investor seeking dividends, more than half, or 55%, have increased dividends compared to a year ago.

Oliver isn’t the only one suggesting that this reporting season signals a “bottoming in the profit cycle”. That means the current pullback is probably more of a digestion. If you don’t know what that means, check Peter’s note for today if you haven’t already.

Only three companies report today but another 24 will have announced by the end of this month.

Resource companies mixed

Thursday was a massive day for companies and there were plenty of big names surprising, and unsurprising, the market (see table for our top 25).

We wrote about changes at the top of BHP last Thursday but it seems the market is still a little unsure as its share price dropped by 4.5 %. One to watch carefully.

Also in the resources sector, Woodside Petroleum had a better than expected result, its 24.5% increase in underlying profit was up on most market analysts’ expectations.

It will pay investors a US65c dividend. Woodside is benefiting from its focus on exporting gas – its Pluto development began adding to the company’s bottom line in April. The stock ended up the week 2.2 % higher (Friday close to Friday close).

One of the biggest movers in our top 25 was BlueScope Steel, which closed 16.2% higher.

It announced a loss but that was better than market expectations.

Like all resource related companies, it has suffered from a drop in commodity prices, which has impacted its balance sheet. However in Bluescope’s case the outlook is improving

“In the second half FY2013 we expect a continued improvement with a small underlying net profit after tax (before period-end net realisable value adjustments, subject to domestic demand and margins, spread and FX),” the company said in a statement when it realised the results last week.

Insurers surprise on the upside

Insurers Suncorp and Insurance Australia Group both ended the week strongly.

IAG almost tripled its profit during the period, partly due to the lack of disasters in the six months to December. Interim dividend was also pushed up to 11c from 5c, but that was below market expectations of 12.3c per share.

Suncorp saw net profit up 48% and an increase in its interim dividend of 25% to 25c. That yielded a fairly low payout ratio of 52% of cash earnings per share.

The outlook for both IAG and Suncorp may not be so good given the disasters in the first quarter of this year.

Coca Cola Amatil announced its final results but was more in the news for rumours about chief executive officer Terry Davis stepping down by the end of the year.

The beverage company announced a dividend of 32c plus a special dividend of 3.5c, which was partly to compensate for a franking level of just 75%. Those dividends bring total dividends for the year to 59.5c, which the company said was up 13.3 % on the previous year.

Look out for James Dunn and JP Morgan’s articles in our Thursday newsletter for the low-down on the whole season.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.

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