NZ earnings season meets expectations, outlook for 2014, 2015 pulled back, First NZ says
By Tina Morrison
Sept. 3 (BusinessDesk) – New Zealand’s 2013 earnings season met expectations with most companies posting results in line
with estimates, although future growth assumptions have been pulled back for the coming two years, brokerage First NZ
Capital says.
Sixty percent of the 25 listed companies which First NZ monitors reported earnings per share growth in line with analyst
expectations, the brokerage said in a note published today. Some 28 percent of companies exceeded expectations, largely
because of bigger gains from cost cuts, while 12 percent disappointed, First NZ said.
Those exceeding expectations included Michael Hill International, Fletcher Building, PGG Wrightson, Summerset and Steel & Tube Holdings. The biggest disappointments were Trade Me, Sky City Entertainment Group, Port of Tauranga, Chorus and
Sky Network Television.
About 40 percent of companies posted double-digit earnings per share growth, while 28 percent showed a contraction,
mostly due to exposure to the weakening Australian economy, softer global markets, an elevated New Zealand dollar,
drought effects or because the latest year was compared with the buoyant Rugby World Cup period the year earlier, the
brokerage said.
Still, earnings per share expectations for coming years drifted lower, with 2014 growth revised down to 5 percent from 7
percent and 2015 softening to 7 percent from 8 percent, First NZ said.
Outlook comments from management were generally optimistic. Most companies were confident that the domestic economy was
building momentum although several remained focused on improving efficiency and managing costs with a key risk being
exposure to a potentially weaker Australian economy, the brokerage said.
In line with last year’s earnings season, just over two thirds of companies increased their dividends on the back of
robust balance sheets and increased confidence about future prospects. Only stock exchange operator NZX and
telecommunications company Telecom Corp. reduced their dividends, First NZ said.
(BusinessDesk)