Earnings Season Insights | March 2016
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Peter Warnes is Morningstar's head of equities research. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar.
Despite well-publicised headwinds facing both the economy and corporate Australia, the recent reporting season was moderately better than expected. Dividends generally tracked modest earnings growth, with payout ratios not being pushed to alarming levels. Management generally dampened expectations where necessary during the multitude of November annual general meetings. Currency tailwinds assisted those with meaningful overseas operations. Cost-out was a feature helping to support margins as revenue growth was generally hard-earned.
Expectations for any company directly or indirectly associated with the resources and oil and gas sectors were pared significantly in the wake of widespread, indiscriminate commodity price weakness and despite very extensive and deep cost cutting. While some still disappointed, others surprised with “less awful” results...
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