Stocks to Watch Next Week: IAG, REA, NWS, CRN, RMD

Summary

• Insurance Australia Group to release detailed results for FY2020 on 7 August 2020, expects gross written premium growth of ~1.1%
• REA Group to announce its FY20 results on 7 August 2020; for nine months ended 31 March 2020 REA reported revenue of ~A$640.2 million.
• News Corp to release its Q4 and FY for the FY2020 on 6 August 2020.
• Coronado Global Resources’ ROM coal production and revenue in the June quarter down by 27.2% & 25.6%, respectively.
• ResMed set to release its financial and operational results for Q4 FY20 on 5 August 2020, revenue in 3Q was up 16%.

During this reporting season, many companies are posting the impact of COVID-19 pandemic on their business and financial performance. COVID-19 has infected over 16.82 million people including 662,095 deaths as per the World Health Organization (at 6:03 PM CEST on 30 July). The spread of coronavirus infection has left many businesses across the world counting their costs and pondering how the recovery would be.

It is believed that Q1 CY2020 did not reflect the impact of COVID-19 and that Q2 CY2020 results would give a real picture of the effect the pandemic has had on the economy. With earnings season on the way, market participants’ focus has shifted on companies announcing their quarterly/full-year results.

Let us look at five such companies that will release their results next week and could be the ones to look for - IAG, REA, NWS, CRN, RMD.

Insurance Australia Group Outlines FY20 Results

Insurance Australia Group Limited (ASX:IAG) is the leading general insurance player across New Zealand and Australia. The Group offers the general insurance products range from those in homes, businesses, along with lifestyles.

The COVID-19 pandemic is projected to have had a moderately negative effect on the GWP of IAG in the fiscal year 2020, and a broadly neutral impact on its reported insurance margin.

On 24 July 2020, Insurance Australia Group provided an update on its results for the financial year 2020 (year ended 30 June 2020) that the Company will be releasing its detailed results for FY20 on 7 August 2020. Ahead of that, the Company anticipates reporting-

• Gross written premium growth of around 1.1%, consistent with the ‘low single-digit’ guidance maintained throughout FY20.
• An insurance margin of nearly 10.1%, with the loss against prior guidance of 12.5-14.5% mainly led by adverse natural perils, prior period reserving, and credit spread factors.
• Total profit after tax was approximately A$326 million on the sale of 26% interest of IAG in SBI General Insurance Company in India, which completed at the end of March 2020.

On 31 July 2020, IAG stock closed at A$5.090, down by 0.973%, with a market cap of A$11.88 billion.

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REA Group to Announce its FY20 Results on 7 August 2020

A multinational digital advertising business REA Group Limited (ASX:REA) operates Australia’s leading residential, commercial and share property. REA Group operates websites like Flatmates.com.au, realestate.com.au, realcommercial.com.au, iproperty.com.my, iproperty.com.sg, etc.

The Group owns an Australian mortgage broking franchise group-Smartline Home Loans Pty Ltd, and a leading provider of property data services- Hometrack Australia Pty Ltd.

On 28 July 2020, REA Group disclosed that it would announce its results for the financial year 2020, ended 30 June 2020 on 7 August 2020.

Earlier on 8 May 2020, the Group disclosed its results for the nine months ended 31 March 2020 as reported by News Corporation.

Group financial highlights from core operations for the 9-months ended 31 March 2020:

2020 comprises revenue of ~A$640.2 million and EBITDA of ~A$390.8 million.

On 31 July 2020, REA stock closed at A$108.480, down by 1.881%, with a market cap of A$14.56 billion.

News Corp to Report Q4 & Full-Year 2020 Earnings

ASX-listed global diversified media and information services Company News Corporation (ASX:NWS) focused on creating & distributing reliable and engaging content to consumers and businesses all over the world.

On 27 July 2020, News Corp revealed that the Company would release its Q4 and FY results for 2020 on 6 August 2020.

Fiscal 2020 3Q Key Financial Highlights- On 5 July 2020, the Company reported its third-quarter results for the fiscal year 2020-

• Revenues for the period were US$2.27 billion, down by 8% compared to US$2.46 billion in the prior year.
• Total Segment EBITDA for 3Q FY20 was reported to be US$242 million compared to US$247 million in the fiscal year 2019.

Commenting on the third-quarter results, Chief Executive Robert Thomson said:

On 31 July 2020, NWS stock closed at A$17.490, down by 2.887%, with a market cap of A$10.43 billion.

DO READ: Is Cash Crunch Fear A Reality As We Battle Coronavirus?

Coronado Global Resources’ June Quarter Revenue Plunges 25.6%

ASX-listed Company Coronado Global Resources Inc (ASX:CRN) is a leading international manufacturer of high-quality metallurgical coal, which is an essential element in steel production.

On 14 July 2020, the Company updated the market with its quarterly report for June 2020 quarter highlighting the operational, sales and financials.

• The Company stated that there were no reported cases of COVID-19 at any Coronado operations or corporate locations so far. ROM coal production for the June quarter was 5.0 Mt, down 27.2% on the March quarter.
• June quarter sales volumes of 3.8 Mt were down 14.7% on the previous quarter mainly driven by the temporary idling of US operations with customer shipments produced from existing stockpiles. Sales volume in Australian (Curragh) for the June quarter were up 16.7% to 3.0 Mt.
• Revenue in the June quarter revenue was reported to be US$304 million, down 25.6% on the last quarter, due to lower sales volume along with lower realised prices.
• Full-year production in FY20, with the impact of COVID-19 pandemic on international markets, now projected between 16.5-17 million tonnes.

Outlook

During June 2020 quarter, steel mills have restarted or raised manufacturing of steel as economic conditions improved moderately, with encouraging indications from the automotive as well as construction industries. Moreover, steel production in China operating at record levels as the construction stimulus strengthens demand.

On 31 July 2020, CRN stock closed at A$0.875, down by 0.568%, with a market cap of A$850.53 million.

ResMed to Report Q4 FY20 Earnings on 5 August 2020

ASX-listed digital health player ResMed Inc (ASX:RMD) provides innovative solutions for the treatment of people and to keep them away from the hospital. The medical devices offered by ResMed are cloud-connected and transform care for patients having COPD, sleep apnea, and other chronic illness.

ResMed intends to release its financial as well as operational results for the Q4 FY2020 on 5 August 2020, after the NYSE closes.

Third-quarter Revenue of ResMed Climbed by 16%: On 30 April 2020, ResMed updated the market with its March quarter results (ended 31 March 2020)

• The revenue of RMD in March quarter rose by 16% to US$769.5 million.
• GAAP gross margin of ResMed increased by 58.4% with a non-GAAP gross margin expanded 70 bps to 60.0%.
• Net operating profit in March quarter 2020 jumped by 39%.

On 31 July 2020, RMD stock closed at A$28.280, down by 0.772%, with a market cap of A$41.29 billion.