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We are in a very exciting period of the Australian business currently- the earnings season! With publicly listed companies dropping their earnings reports, revised outlook, and their take on the macro and micro economic environment, investors and media houses have been eying the stock market momentum keenly.
Out of the many companies set to release their earnings report next week, we have cherry-picked 10 stocks that have the keen attention of stock market enthusiasts.
Altium Limited (ASX:ALU) - To Release H1FY20 Results on 17 February 2020
A multinational software corporation, ALU is currently focused to lead, unify and transform the PCB design and global electronics industry. Chairman Samuel Weiss believes that it is an exciting period in the industry with forces like Artificial Intelligence (AI), Big Data, cloud computing, and 5G redefining experiences.
What to Expect?
Addressing media and shareholders in the AGM of December 2019, Mr Weiss stated that the above-mentioned forces will continue to propel ALU in the foreseeable future. The Company has a rich history of delivering industry-leading results in technology and engineering, and in terms of financial returns for shareholders.
As per the Company outlook for FY20 -
- Revenue will possibly be in the range of USD 205 million to USD 215 million;
- EBITDA margin will be in the range of 37% to 38%;
- The strategic revenue target of USD 200 million for FY20 was set in 2016 and ALU expects to exceed the target this year via organic growth;
- ALU is committed to a subscriber base target of 100,000 and revenue of USD 500 million by 2025;
- Investment in the “Rule of 50’’, a “line and length” financial strategy to transform the electronics industry is likely.
QBE Insurance Group Ltd (ASX:QBE)- To Release FY19 Results on 17 February 2020
It sure is an eventful phase for Australian insurance companies, with a prolonged drought, adverse weather conditions, recent bushfires and a hailstorm that followed. QBE, employing over 12,000 people, is a general insurance and reinsurance company, catering to its clients with personal, commercial and specialty products in addition to solutions related to risk management.
What to Expect?
Discussing weather impacted 2019 North American crop result, QBE Group CEO, Mr Pat Regan stated that besides the unusually weather-impacted harvest North American business this year, the rest of the Group continues to perform well with pricing momentum accelerating.
- The Company currently anticipates that its combined operating ratio could be slightly above the top end of its 2019 target range of 94.5% to 96.5%;
- Besides this, the investment performance remains on track to report a net investment return towards the upper end of the 2019 target range of 3.0% to 3.5%;
- The Company anticipates a 2020 combined operating ratio target range of 93.5% to 95.5%;
- The 2020 net investment return target range revised down to 2.5% to 3.0% demonstrates lower global risk-free rates.
BHP Group Limited (ASX:BHP)- To Release H1FY20 Results on 18 February 2020
One of Australia’s most famous public entities and a world-leading resources company, BHP extracts and processes minerals and oil & gas, and its products are sold worldwide. At the end of December 2019, the Company had 6 major projects under development. These projects have a combined budget of USD 11.4 billion over their life and are focused on petroleum, copper, iron ore and potash. All of its major projects under development are tracking to plan.
What to Expect?
- Unit costs for Petroleum, WAIO, Queensland Coal and NSWEC expected to be in line with full year guidance;
- Unit costs for Escondida tracking below full year guidance in H1 FY20 primarily due to higher by-product credits;
- Exploration expense (including petroleum and minerals exploration programs) would be ~ USD 231 million;
- Adjusted effective tax rate is expected to be at the lower end of the guidance range of 33% to 38%;
- The Group’s net debt target range is likely to be USD 12 to USD 17 billion.
Coles Group (ASX:COL)- To Release H1FY20 Results on 18 February 2020
One of Australia’s most trusted retailers and gigantic consumer staples company, Coles set out on its four-year transformation journey in 2019, which is based on three pillars- inspiring customers through best-value food & drink solutions to make lives easier, Smarter Selling, and Win Together with its team members, suppliers and communities.
What to Expect?
- The provisional first half FY20 Group EBIT is expected to be between $710 million and $730 million;
- COL continues to aim for cash realisation greater than 100% each year;
- The Company has set a target of 5,500 Aboriginal and Torres Strait Islander team members by 2023.
Wesfarmers Limited (ASX:WES)- To Release H1FY20 Results on 19 February 2020
One of Australia’s most diverse businesses and largest employers, Wesfarmers caters to home improvement, outdoor living; apparel and general merchandise; office supplies; and has an industrials division. Majority of the Group’s retail businesses have seen an improvement in sales growth in the recent past.
What to Expect?
Addressing shareholders in the Company’s last AGM in November 2019, Managing Director Rob Scott mentioned that he is optimistic about the outlook, as the Group remains confident in investments and new growth platforms.
- Weather conditions and successful execution during the important Christmas period will impact sales performance for the year;
- Cost headwinds incurred in 2019 will have an impact on earnings growth in the near term, though they will be eventually offset through productivity and sales growth benefits over time;
- The next phase of Bunnings’ growth is in pipeline;
- The repositioning of Target is continuing and further weakness in sales is expected in the process;
- WES anticipates Officeworks’ earnings growth to be impacted by ongoing investment in price as well as higher team member wages, post new enterprise agreement.
Nearmap Limited (ASX:NEA)- To Release H1FY20 Results on 19 February 2020
A pioneer of aerial imaging, Nearmap witnessed a year of execution in FY19 with the expansion of its product suite. The Company continued to strengthen its functional areas as it has finally announced significant progress in AI and other technologies, which is likely to be transformative for the business, as a whole.
What to Expect?
According to a market update on 30 January 2020 on the Company’s performance for six months to December 2019, its closing Annualised Contract Value (ACV) noted at $96.6 million, representing an year on year increase of 23%. The statutory revenue for the six months too grew by 31% to $46.4 million, subject to audit review.
- On 30 January 2020, NEA revised down its FY20 ACV guidance to $102 million – $110 million, which was previously $116 million - $120 million. The downward revision is driven by unforeseen downgrade and deal timing events for a small number of major NA customers;
- YoY ACV growth is expected to be 20% - 40%;
- Cash consumption in H2FY20 will be at a reduced rate, with a focus on driving returns from investments;
- Sales team contribution ratio will be between 30% - 40% (in North America);
- In ANZ, the sales team contribution ratio for 1HFY20 will be between 65% and 75%.
To know about more exciting outlook and companies to watch out for, we request you to go through our exclusive REPORTING CALENDAR.
