Energy
WorleyParsons Ltd (WOR) Mining slowdown detracts from strong oil and gas outlook 18/05/2013 07:17
WorleyParsons surprised with a fiscal 2013 earnings downgrade driven by a slowdown in resources activity in Western Australia and slower...
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WorleyParsons surprised with a fiscal 2013 earnings downgrade driven by a slowdown in resources activity in Western Australia and slower than expected growth at its WorleyParsonsCord construction contracting business in Canada. Previous guidance was for earnings growth, but net profit after tax (NPAT) is now expected to be in the range of AUD 320-340 million, up to 7% below fiscal 2012 NPAT of AUD 345.6 million.
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more Energy reports Materials
BHP Billiton Limited (BHP) Still the Resources Benchmark Despite the Lower Fair Value 23/05/2013 18:45
We reduce our BHP fair value estimate by 20%, from AUD 50 per share to AUD 40 per share. The...
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We reduce our BHP fair value estimate by 20%, from AUD 50 per share to AUD 40 per share. The action follows a comprehensive review of operating and capital costs and a re-assessment of growth prospects for the group. Iron ore, petroleum and copper remain the three largest segment contributors accounting for an unchanged 82% of group fair value. There has however been considerable mix shift following our review.
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James Hardie Industries (JHX) Fiscal 2013 benefits from US housing recovery - margins will recover 23/05/2013 18:08
Supported by the gradual recovery in US housing activity James Hardies reported top-line growth of 6% in fourth quarter 2013,...
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Supported by the gradual recovery in US housing activity James Hardies reported top-line growth of 6% in fourth quarter 2013, taking full year sales 7% higher to USD 1.32 billion. Like the third quarter, demand for lower priced products and costs associated with increasing capacity and improving plant efficiency are hurting margins. Despite some improvement in the fourth quarter, group EBIT margins were down from 15.3% to 13.7%.
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Rio Tinto (RIO) Still Best in Class in Iron Ore 23/05/2013 21:10
We reduce our Rio Tinto fair value estimate by 22% from AUD 90 per share to AUD 70 per share....
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We reduce our Rio Tinto fair value estimate by 22% from AUD 90 per share to AUD 70 per share. The action was undertaken in conjunction with the comprehensive review of BHP Billiton. In a similar vein we have re-visited capital and operating cost forecasts and consequently re-assessed Rio’s growth prospects.
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Boart Longyear (BLY) Earnings fall as market conditions deteriorate 22/05/2013 06:10
Boart announced forecast fiscal 2013 revenue of around USD 1.5 billion and EBITDA of USD 199 million, after previously forecasting...
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Boart announced forecast fiscal 2013 revenue of around USD 1.5 billion and EBITDA of USD 199 million, after previously forecasting revenue of USD 1.7 billion and EBITDA of USD 260 million.
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Monadelphous (MND) Tender pipeline evaporates making further growth in earnings challenging 22/05/2013 19:16
The mining service sector has been beset by earnings downgrades, with UGL, WorleyParsons and Transfield Services providing details in recent...
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The mining service sector has been beset by earnings downgrades, with UGL, WorleyParsons and Transfield Services providing details in recent days of an industry facing strong headwinds.
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Fleetwood Corp (FWD) Fiscal 2013 deteriorates - Long-term looking less accomodating 22/05/2013 16:45
Last month we lowered our earnings expectations and valuation following news of mining and energy project deferments, falling coal and...
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Last month we lowered our earnings expectations and valuation following news of mining and energy project deferments, falling coal and precious metal prices as well as a spate of mining service companies hosing down earnings expectations. We expected some improvement in the second half, with less disruption from refurbishment work at the Searipple (Karratha) accommodation village. But the softening resources sector has hurt demand for both portable and Searipple accommodation more than anticipated.
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Myer Holdings Limited (MYR) Myer’s Sales Momentum Weakens in the Third Quarter 22/05/2013 18:10
Myer announced third quarter fiscal 2013 sales of AUD 652.5 million, up 0.5% on the same period last year. Comparable...
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Myer announced third quarter fiscal 2013 sales of AUD 652.5 million, up 0.5% on the same period last year. Comparable sales for the quarter increased 0.4%.
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Thorn Group (TGA) Sowing seeds for future growth - Radio Rentals performs well despite flat customer growth 23/05/2013 09:05
Our previous note flagged concerns that Thorn’s future growth would unlikely be as robust as the previous five years. While...
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Our previous note flagged concerns that Thorn’s future growth would unlikely be as robust as the previous five years. While we maintain this view, we are slightly more positive on the resilient qualities of the core Radio Rentals and Rentlo (RR&R) business following the result. Fiscal 2013 NPAT was in line with forecasts at AUD 29.8 million and the dividend increased 9%. The highlight of the result was the performance of RR&R, contributing the clear majority of earnings (89%) and posting 3% EBITDA growth.
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Wesfarmers Ltd (WES) Target Targeted for Restructuring and Inventory Clearance 18/05/2013 07:19
Weak second half sales for Target, exacerbated by a late start to the winter season will result in higher clearance...
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Weak second half sales for Target, exacerbated by a late start to the winter season will result in higher clearance activity. Combined with the on-going cost increases associated with restructure initiatives, earnings for the division will be lower. Target is forecast to deliver fiscal 2013 EBIT of between AUD 140 million to AUD 160 million.
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Health Care
Fisher & Paykel Healthcare (FPH) Initial Impressions: Strong full year results 23/05/2013 13:28
FPH reported very strong full year results which were slightly ahead of our forecast. Underlying NPAT grew 20% to NZD...
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FPH reported very strong full year results which were slightly ahead of our forecast. Underlying NPAT grew 20% to NZD 77 million ahead of our forecast of NZD 75 million. OSA and RAC revenues grew 10% and 18% in constant currency terms in the second half which was in line with management guidance provided in Feb 2013.
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ResMed (RMD) Valuation increase, but still expensive 23/05/2013 21:06
We reduce our cost of equity for ResMed from 11% to 10%. This is in line with the cost of...
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We reduce our cost of equity for ResMed from 11% to 10%. This is in line with the cost of equity Morningstar uses to value other global medical device companies such as Medtronic, St Jude and Boston Scientific. The lower cost of equity increases our fair value estimate from USD 40 to USD 45. In addition to the impact of the lower cost of equity our Australian dollar (AUD) fair value estimate increases further to reflect the translation impact of the weaker AUD.
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more Health Care reports Financials
ASX Limited (ASX) Improved outlook for equity markets drives earnings upgrade 22/05/2013 19:12
An improved market outlook, a less than expected negative impact from competition and ASX’s monopoly in public company listings support...
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An improved market outlook, a less than expected negative impact from competition and ASX’s monopoly in public company listings support or upgrade to medium to long term forecasts for the wide moat firm. Our previous note published 1 May highlighted that a sustained recovery in investment markets, sharply higher IPO activity and a boost in secondary capital raisings were catalysts for an earnings upgrade.
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QBE Insurance Group (QBE) External factors boosting earnings recovery 22/05/2013 14:14
The internal business recovery process has begun. Importantly, we consider a range of positive recent external developments as very supportive...
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The internal business recovery process has begun. Importantly, we consider a range of positive recent external developments as very supportive of our positive investment view and, if continued, will boost earnings quicker than we expected. Over time the improved outlook will justify our positive view and a recovery in investor confidence will follow for the out of favour narrow moat global insurer. QBE’s competitive advantage is sourced from its ability to generate underwriting profits over the long-term despite increasingly expensive natural disasters.
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Stockland (SGP) Balance sheet bolstered in preparation of escalating investment in retail 22/05/2013 12:58
Stockland raised AUD 400 million of additional equity via an institutional placement at AUD 3.88 per security, a 2.5% discount...
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Stockland raised AUD 400 million of additional equity via an institutional placement at AUD 3.88 per security, a 2.5% discount to the previous close. A security purchase plan (SPP) will be offered to eligible retail security holders, up to AUD 15,000, at AUD 3.88. Proceeds will be used for the repayment of debt, with balance sheet gearing to fall by 3% from 27.6% in December 2012.
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The Trust Company (TRU) Update on takeover machinations 23/05/2013 15:10
We provide an update on the takeover battle for Trust between Perpetual (PPT) and Equity Trustees (EQT). Following EQT’s improved...
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We provide an update on the takeover battle for Trust between Perpetual (PPT) and Equity Trustees (EQT). Following EQT’s improved takeover offer for Trust, the Board of Trust continues to unanimously recommend PPT’s offer. Trust’s Board also advised its intention not to offer due diligence access to EQT.
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more Financials reports Telecommunication Services
Singtel (SGT) Digital strategy to deliver long term growth 18/05/2013 07:14
Narrow moat Singapore Telecommunication's (SingTel) fiscal 2013 result was in line with expectations. In line with guidance and our forecasts,...
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Narrow moat Singapore Telecommunication's (SingTel) fiscal 2013 result was in line with expectations. In line with guidance and our forecasts, operating revenue declined 3% to SGD 18.18 billion while EBITDA was stable at SGD 5.2 billion. Free cash flow was solid at SGD 2.9 billion, with dividends from its associates up 8% to SGD 993 million.
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