Healthy earnings results from the likes of CSL Limited (ASX: CSL), Treasury Wine Estates Ltd (ASX: TWE) and Pro Medicus Limited (ASX: PME) helped to push the Australian sharemarket higher on Wednesday, offsetting losses from the major resource stocks as iron ore and oil prices fell.
The benchmark S&P/ASX 200 (ASX: XJO) gained 1.1% following a strong lead from Wall Street on Tuesday night, which was helped higher by the tech sector and improved signs of an easing in tensions between Russia and Ukraine.
The broader S&P/ASX All Ordinaries (ASX: XAO) also added 1.1%, the S&P/ASX All Tech index rose 1%, while the S&P/ASX 200 Resources index slipped 0.6%.
CSL share price shines
The half-year ASX reporting season (full-year, for some companies) is ramping-up, and on Wednesday CSL was a highlight, despite the headline interim profit coming in 5% lower than a year ago, at $US1.76 billion ($2.46 billion).
The profit fall came on the back of a decline in CSL Behring’s revenue due to plasma supply issues. But on the other hand, the vaccine arm, Seqirus, lifted its revenue by 18% on the back of strong growth in seasonal vaccines.
CSL upgraded its guidance and CEO Paul Perreault flagged a return to a “more normalised environment” in January-June after a difficult 2021. The CSL share price surged 8.5% to $263.69.
Treasury Wine uncorks a ripper
Treasury Wine Estates was another flyer on the market, jumping 11.7% as the company showed the stock market that the difficulties in its formerly lucrative Chinese market – after Beijing slapped heavy tariffs on Australian wine two years ago as part of a trade/political dispute with Australia – could be overcome.
That, and the pandemic, hit Treasury Wine hard, but Penfolds remains a very strong business and reallocating wine to export markets other than China appears to have replaced at least half of the lost Chinese earnings.
While Treasury’s net profit fell 7.5% in the December half to $109.1 million, the interim dividend of 15 cents was maintained and investors appeared to reward the company for its reorganised business.
Pro Medicus continues to impress
Health imaging IT provider Pro Medicus reported a strong first-half result, with revenue up 40.3% to $44.3 million, and net profit up almost 53%, to $20.7 million, above consensus estimates. The Pro Medicus share price finished the day 4.1% higher.
Fortescue Metals & Santos report
The ASX resources stocks were not a happy hunting ground on Wednesday. Fortescue Metals Group Limited (ASX: FMG) reported a 32% slide in net profit, to US$2.78 billion, as costs for labour, fuel and shipping all rose.
Fortescue received an average $US96 a dry metric tonne for its iron ore, down from an average of $US114 a tonne a year ago, as the discounts for its lower-grade ore bit hard. That flowed into the earnings fall. Fortescue paid an 86 (Australian) cents interim dividend, down 41% on the record $1.47 interim dividend announced a year ago.
Meanwhile, Santos Ltd (ASX: STO) shares fell 2.8% to $7.19 despite more than tripling its full-year underlying profit thanks to a rebound in oil and gas prices. But 2022 oil and gas production guidance fell short of market expectations.
Elsewhere, BHP Group Ltd (ASX: BHP) lost 2% to $47.33, Rio Tinto Limited (ASX: RIO) slid 0.2% to $118.56, and Woodside Petroleum Limited (ASX: WPL) fell 0.4% to $26.63.
On the plus side, Liontown Resources Limited (ASX: LTR) surged 25 cents, or 18% to $1.64 after announcing a deal to supply Tesla (NASDAQ: TSLA) with more than 100,000 annual tonnes of lithium concentrate over the next five years.
ASX 200 today
Looking ahead, the ASX 200 is expected to open broadly flat this morning, following a mixed lead from US stock markets overnight.
Some big ASX names are set to release reports today, with Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Transurban Group Ltd (ASX: TCL) all on watch. To see when your companies are reporting this February, make sure to bookmark Rask Media’s ASX reporting season calendar.
