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(23 Feb 2011) - February is always a busy
month for stock market analysts with most companies
reporting either their half-yearly or full-year
results. For the past decade, we’ve maintained
a database of these earnings announcements and
have added a further 135 so far this financial
year.
In broad terms, the December half figures are
quite encouraging. Net profits are up for the
first time since 2007, profit margins are at a
record high and more than 80% of companies have
either maintained or lifted their final dividend.
Our sample of 286 companies
shows a solid rebound in sales and pre-tax earnings
in the six months to 31 December 2010.
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FY11 Corporate Earnings
Results
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| Six months to: |
Dec-2010
|
Dec-2009
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| Number
of companies in sample |
286
|
300
|
| Median sales
growth (%) |
8.3
|
-1.7
|
| Median
pre-tax profit growth (%) |
4.0
|
-9.9
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| Median net
profit growth (%) |
0.4
|
-11.0
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| Median
EPS growth (%) |
-3.5
|
-17.1
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| Median net
margin (%) |
12.7
|
-9.0
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| Median
dividend yield (%) |
5.0
|
4.7
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| Average share
price reaction (%) |
-0.27
|
0.49
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Although sales grew by 8.3%
compared to the same period a year earlier, the
rebound was less than analysts expected and was
well below the ten-year average of 10.5% per annum.
On the plus side,
cost-cutting has resulted in a further improvement
in net profit margins. Over the past decade, net
profit margins have averaged 8.9%; this year the
median figure was 12.7%.
However investors
were mainly focused on bottom line and were undoubtedly
hoping for more than the meagre 0.4% earnings
growth which was reported. This probably explains
why only a minority of companies - just 39.5%
- rallied on the day of their profit release.
Typically around 48% of companies gain on the
day of their profit results.
Warning: While all care has been
taken in the preparation of this document (using
sources believed to be reliable and accurate),
we do not accept responsibility for any loss suffered
by any person arising from reliance on this information.
This document is not financial product advice
and does not take into account any individual's
objectives, financial situation or needs.
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