Australian Stocks Fall on Earnings Worries

123jump.com Staff
23 Feb, 2009
New York City

Stocks in Australia dropped on negative earnings outlook from Fairfax Media and a loss estimate from BlueScope Steel. In Sydney, ASX 200 index lost 1.5%. The mining giant, BHP Billiton reduced its headquarter count as the demand and prices of metals decline but operating costs remain high.

[R]3:00AM New York, 7:00PM Sydney - BlueScope Steel profit increases to A$407 million in the first half. BHP Billiton cuts staff at its headquarter.[/R]

Australian stocks dropped after Fairfax Media offered negative earnings outlook and BlueScope Steel predicted loss in the current quarter.

Energy stocks also declined as crude oil prices dropped 1.4% to $38.90 a barrel.

In Sydney trading ASX 200 index fell 1.5% or 51.2 to 3,351.20.

Of the ASX 200 index stocks, 52 rose, 132 dropped, and 16 were unchanged. HFA Holdings led advancers in the index shares with a rise of 12.5% followed by Centro Retail Group advancing 11.9%.

BlueScope Steel First Half Profit Rises

BlueScope Steel reported today that its net profit after tax rose to A$407 million in the six months ended December 31 from A$116 million in the comparable year-ago period, while underlying net profit after tax advanced 57% to A$479 million in the period.

Sales at BlueScope increased 30% to A$6.16 billion from A$4.73 billion in the same period a year earlier.

According to the report, the company''s first half results were driven mainly by a first quarter underlying profit of A$430 million.

However, sales in the second quarter dropped markedly on worsening conditions on the global market.

BlueScope managing director and chief executive officer Paul O''Malley said it forecasts a loss in the second half of the year on declining demand, dropping metal prices and high raw material prices.

""""Government stimulus packages may translate into some improvement in economic activity later this calendar year, but it remains to be seen how it will affect steel demand,"""" said O''Malley.

The steel maker also slashed its interim dividend from 22 Australian cents per shares to 5 Australian cents per share.

BHP Billiton to Reduce Head office Staff

BHP Billiton announced today that it will reduce the number of employees at its headquarters in Melbourne to 350 from 600 by the end of June on relocation of divisional units to offices closer to operations.

The miner''s coking coal business will be relocated to the bulk of its mines in Queensland, while the thermal coal business will be relocated to New South Wales.

Gainers & Losers

HFA Holdings led advancers in the ASX 200 index shares with a rise of 12.5% followed by increases in Centro Retail Group of 11.9%, in Kingsgate Consolidated of 9.1%, in Billabong International of 7.6%, and IOOF Holdings of 7.5%.

Macquarie Countrywide led decliners in the ASX 200 index shares with a decline of 18.8% followed by losses in Goodman Group of 16.5%, in Macquarie DDR Trust of 15.2%, in BlueScope Steel of 10.9%, and St Barbara Ltd of 10.9%.

Energy stocks shed as crude oil prices dipped 1.4% to $38.90 per barrel. Roc Oil Co. plummeted 9.9% and Nexus Energy dipped 8.5%.

Fairfax Loss Rises to A$365.3 million

Fairfax Media reported today that net loss after tax in the six month period ended December 30 was A$365.3 million from the same period a year ago and underlying operating earnings declined 11.6% to A$370 million from a year ago.

Non-cash impairment of the value of mastheads, licences and goodwill across all publishing and broadcasting media increased to A$447.5 million.