Earnings Lift Australian Indexes 4% in Feb, Woolworths Up 6%

Marcus Jacob
28 Feb, 2014
New York City

Australian stocks struggled for the second day after the release of weak capital spending outlook. However, better than expected earnings lifted the indexes by 4% in February. Woolworths reported best first-half year results in three years and lifted full-year outlook.

[R]5:00 PM Sydney – Australian stocks struggled for the second day after the release of weak capital spending outlook. However, better than expected earnings lifted the indexes by 4% in February. Woolworths reported best first-half year results in three years and lifted full-year outlook.[/R]

Australian market indexes closed down in lackluster trading but the benchmark index gained 4% in the month on earnings reports.

Australian investors entered the year with the outlook for better earnings and most companies either met or exceeded earnings.

Companies focused on the domestic markets have been improving operations and are adjusting to elevated dollar and resource sector companies are focused on paring unrelated diversification.

Australian dollar rose to 89.44 U.S. cents and flat for the week. Stock market trading turnover surged to 1 billion shares worth $7.9 billion.

The ASX 200 index slid 6.60 to 5,404.80 and the broader All Ordinaries fell 5.60 to 5,415.40.

For the week, the ASX 200 index slipped 0.6% but for the month advanced 4.4%.

Stocks in Review

Rio Tinto rose 24 cents to $66.84. BHP closed unchanged at $38.38.

Woodside Petroleum Limited decreased 20 cents to $37.95 and oil and gas explorer has signed sales agreement with Korea Gas Corporation.

Westpac fell 7 cents to $33.47.

Harvey Norman Holdings Limited jumped 2.6% to $3.21 after the retailer reported global sales in the first-half ending in December climbed 3.6% to $2.99 billion and net profit surged 36% to $111.4 million from $81.92 million a year ago.

Virgin Australia Holdings Ltd closed unchanged at 35 cents after the second largest airline reported revenues in the first-half ending in December jumped 6.2% to $2.24 billion from $2.1 billion a year earlier.

Net in the period swung to a loss $83.7 million compared to a profit of $23 million and diluted loss per share swung to 3.1 cents from earnings of 1 cent a year ago.

Woolworths Limited slipped 0.9% to $36.07 after the food and liquor retailer said total group sales in the first-half ending in December jumped 3.8% to $31.8 billion from $30.7 billion a year ago.

Net profit in the period soared 14.5% to $1.32 billion compared to $1.15 billion a year earlier.