CSL Does it Again | HBL, WES, WPL Report Earnings

16 August 2018

Global markets retraced overnight as US stock indices slid on a broad decline over concerns of a strengthening dollar, Turkey’s currency crisis and United States’ trade relations with its partners. In stock news, China's Tencent Holdings reported its first profit decline in almost 13 years, putting pressure on the US tech sector.

Closer to home, corporate earnings season is now in full-swing across Australia and NZ, with major stock moves being driven by company profit announcements. During earnings season, the focus of investors usually shifts away from broader market drivers and back to company specific news flow. Yesterday saw several stocks under our research coverage report results, including ASX heavyweights CSL and Wesfarmers, as well as Heartland Bank on the NZX which we touch on below. 
 

Stock on Focus: CSL (CSL:AX)
CSL continues its remarkable run, as its shares vaulted +6% yesterday as the blood products and vaccines giant posted a 29% cent increase in net profit which was ahead of guidance and lifted its dividend by 30%. Sales revenue for the year to June 30 also rose, up 14.7% to $US7.59 billion.

During the year CSL delivered growth across almost every aspect of its business, with CSL Behring delivering sales growth in every region. Much of the growth was driven by wider margins, with operating earnings margins rising from 25% to 30%. CSL’s return on invested capital (ROIC) improved from 24.5% to 25.9%.

This was another very impressive result that defied the sceptics, and with CSL reaching new all-time highs it continues to be one of our top performing ASX stock picks. 

We currently have a BUY recommendation on CSL.

Members should look out for a full update on CSL to be released in our weekly report.

 

 

Australia & New Zealand Market Movers

The Australian share market rallied yesterday (ASX 200 index +0.47%) as investors cheered results from CSL and Wesfarmers while selling out of Commonwealth Bank and Insurance Australia Group. Wesfarmers rallied as investors appeared to overlook a hefty -58.3% in net profit to $1.19 billion to focus on a 5.2% lift in underlying net profit to $2.9 billion that exceeded analyst forecasts. Woodside Petroleum shares were a touch lower after its first-half underlying net profit rose 11%to $US566 million, which was around the mid-point of analyst estimates.

 
The New Zealand market was slightly higher on Wednesday (NZX 50 index +0.17%) as the focus remains on local company profits in earnings season. Heartland Bank reported an 11% increase in net profit, driven by growth from its reverse mortgage business, and said it will target double-digit earnings growth again for the 2019 year. Still, the stock fell as the bank increased provisioning for bad debts. In other news, shares of wind farm operator and developer Tilt Renewables jumped as Infratil and Mercury NZ mounted a takeover offer for at $2.30 a share. Infratil already holds a controlling stake in Tilt having overseen the demerger from Trustpower in 2016.

3 Things Markets Will be Watching this Week

1.               US corporate earnings season moves into its latter stages.

2.               Locally, investors in Australia and NZ will have a number of profit announcements to focus on as earnings season gets into full-swing.

3.              Geopolitics, with the Turkey economic situation hitting headlines over the weekend.  

 

Have a Great Day,

Team

Global markets retraced overnight as US stock indices slid on a broad decline over concerns of a strengthening dollar, Turkey’s currency crisis and United States’ trade relations with its partners.

Do You Want Daily Market Insights?

If you’re interested in staying up-to-date with the latest news and analysis on stocks, be sure to sign up to BlackBull Research.

1 Month Free Trial

Access our expert stock market research Free of charge with no obligation

Free 1 Month Free Trial

Unlock this article & access our expert stock market research

ASX, NZX & USD Stock Buy, Hold, Sell recommendations. Model Portfolios. Daily news and more

[pmpro_checkout]