Australian Shares Set to Decline as Nvidia Earnings Loom Large

Australian shares are expected to open lower today, despite Wall Street closing with modest gains overnight. ASX futures were down 29 points, or 0.4%, to 7996 near 7 am AEST, indicating a bearish start. Investors are keenly awaiting the quarterly results from Nvidia, a major player in the tech sector, which is scheduled to release its earnings report after the New York market closes on Thursday morning. 

Nvidia's stock rose by 1.5% to $US128.30 ahead of its earnings announcement, highlighting the significant market anticipation surrounding the company. Antonio Ernesto Di Giacomo, senior market analyst at XS.com, emphasized the critical importance of Nvidia’s results, stating that the outcome could have a broad impact on the tech sector and market sentiment. 

Commodities Market Update 

In the commodities market, crude oil prices fell following Goldman Sachs' decision to lower its forecast for Brent crude prices. This revision reflects unexpected increases in OECD inventories and a reduced fair value estimate for long-dated prices. Meanwhile, iron ore continued its rebound, rising above $US100 per tonne, signaling resilience in the face of fluctuating global demand. 

Stocks in Focus 

Several key ASX-listed companies are in focus today, with earnings reports and strategic moves driving market interest. 

Woolworths Group (ASX:WOW) 

Supermarket giant Woolworths has made headlines by rewarding shareholders with a special dividend of 40 cents per share, following the sale of its 5% stake in Endeavour Group. This special dividend was higher than market expectations. Additionally, the company declared a final dividend of 57 cents, bringing the total dividend for the year to $1.44 per share. 

Tabcorp Holdings (ASX:TAH) 

Tabcorp is undergoing significant strategic changes under the leadership of CEO Gillon McLachlan, who has decided to abandon the wagering giant’s ambitious 2025 strategy. The company reported a net loss of $1.4 billion, driven by a major non-cash impairment related to its NSW and South Australian wagering assets. This is the second time within a year that the company has had to write down the value of these assets. 

Flight Centre Travel Group (ASX:FLT) 

Flight Centre achieved a record performance in its latest earnings report, surpassing pre-COVID levels as airfares moderated and travel demand remained strong. The travel agency reported a total transaction value (TTV) of $23.74 billion for the year ending June 30, just surpassing the financial year 2019 figure and exceeding last year's TTV by $1.8 billion. 

NextDC Limited (ASX:NXT) 

Data center operator NextDC reported strong underlying earnings, driven in part by a decline in power prices in the second half of the year. The company’s underlying earnings reached $204.3 million, exceeding its guidance for FY24. 

Fortescue Metals Group (ASX:FMG) 

Fortescue Metals reported an 18% increase in net profit, reaching $US5.7 billion (approximately A$8.4 billion) for the fiscal year 2024. This strong performance has allowed the company to declare total dividends of $1.97 per share, underlining its robust financial position in the mining sector. 

Nine Entertainment Co. Holdings (ASX:NEC) 

Nine Entertainment faced challenges in the television segment, with a weak advertising market contributing to a $119 million decline in its TV division’s revenue. Overall, the company’s revenue fell by 3% to $2.62 billion, and profit decreased by 22% to $216.4 million for the fiscal year 2024. 

APA Group (ASX:APA) 

APA Group reported a 9.7% increase in underlying earnings for the full year, benefiting from the expansion of its east coast gas pipeline network and early contributions from the recently acquired Pilbara Energy. The company’s statutory net income more than tripled to $998 million, boosted by a reassessment of its interest in a pipeline. 

Origin Energy (ASX:ORG) 

In a significant board reshuffle, Origin Energy announced the appointment of former Tilt Renewables CEO Deion Campbell as a new board member. This move is part of a broader transition that will also see the retirement of longstanding director Steve Sargent. 

Conclusion 

The Australian market is poised for a cautious start as investors digest the latest developments on Wall Street and prepare for a slew of earnings reports from major ASX-listed companies. With Nvidia's earnings on the horizon and key movements in the commodities market, today’s trading session could be shaped by both global and domestic factors. Companies like Woolworths, Fortescue Metals, and Flight Centre will be closely watched as their financial results come under scrutiny, providing critical insights into the health of their respective sectors and the broader economy.