Published on : Feb 28, 2014
Several large companies in Australia have beaten expectations by posting higher earnings and profits than expected. This is being regarded as one of the most positive reporting sessions since the last couple of years.
The reporting session of February wrapped up with over 50% of the listed companies in Australia posting profits or beating expectations of earnings. Though there still prevail talks and concerns pertaining to the collapse of the mining boom here, companies operating in the resources sector have reported considerable increase in profits. The production figures are picking up after several years of investment. The most followed benchmark of S&P/ASX200 showed a 4% spike in Feb2014, and ended at 5,404.8 points at the end of the day on Friday.
Market analysts note that resource stocks as well as banks have played a role that is bigger than usual. And this has helped drive up market performance, according to Shane Oliver, AMP’s head of investment strategy. According to him, the key themes for the massive turnaround have been resources stock-related. This has left the sector on tract for roughly 40% growth in earnings in the current financial year.
A 10% profit was posted by Rio Tinto in its underlying profit, reaching USD 10.2 billion up to mid-February. At the same time, BHP Billiton’s half-yearly net profit rose by a whopping 83% to USD 8.1 billion.
Banks too have contributed a fair share to this upbeat trend. The results from the banking sector have been strong with the market now expecting a 10% increase in FY 2013-14 profits for financial stocks. Though the rest of the market does remain positive, stocks are expected to rise by an average 6%.
But the bottom line, according to market experts, is that the Australian earnings do seem to be on a 15% growth track overall in FY 2013-14.