• ASX flattish as earnings results pour in
  • Breville, Seek dumped, while Temple & Webster was best performer
  • Strike Energy’s shares collapse after reporting problems at gas field

 

The ASX 200 closed flattish on Tuesday as traders struggled to get any direction from Wall Street, with China also closing for the whole week.

Major ASX stocks, including Breville and Seek, were dumped today following soft earnings releases – see more below.

At the sector level, the worst performer was Healthcare, down almost -2% after being dragged down once again by giant CSL – also see more below.

RBA’s governor Michelle Bullock gave a warning in her speech this afternoon that the fight against inflation will take some time, and could suck the spending power out from consumers.

“Going forward, we expect economic growth to remain subdued in the near term as inflation and earlier interest rate increases continue to weigh on domestic demand growth, particularly household consumption,” Bullock said.

Meanwhile, the Westpac and the Melbourne Institute, which measures optimism among Australian consumers, increased by 6.2% to reach 86 in February, marking its highest level since June 2022.

Elsewhere, tensions continue in the Red Sea, with missiles being fired again at passing ships. Bitcoin, which topped US$50k overnight, has pulled back to US$49,770 at the time of writing.

 

BIG CAP WINNERS

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Temple & Webster (ASX:TPW) was the best performing large cap today, up 10% after reporting its half year results. Revenue for the half was $254m, up 23% on pcp, driven by growth in repeat and first-time customers. EBITDA was $7.5m with an EBITDA margin of 2.9%, at the top end of full year 
guidance (1-3%). TPW has now crossed the 1 million active customers milestone for the first time.

Challenger (ASX:CGF) rose after reporting its H1 FY24 results. Statutory net profit after tax (NPAT) was $56 million, up 80% on pcp. Group assets under management (AUM) were $117 billion, up 18% on pcp. Interim dividend was declared at 13.0 cents per share fully franked, up 8% on pcp. Full year FY24 is expected to be in the top half of NPBT guidance range.

 

BIG CAP LOSERS

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Strike Energy (ASX:STX) crashed by over -20% after reporting problems at the South Erregulla well testing operations in the Perth Basin. Strike said upon opening the choke, the well failed to flow, but was also observed to be substantially overbalanced. The well was shut-in and a steady increase in tubing head pressure and associated temperature drop was subsequently observed, where bleed offs of pressure/ gas were detected as hydrocarbons. “The SE-3 flow test has not matched its petrophysical interpretation, which is disappointing. Further analysis and data collection is ongoing and Strike is reviewing the potential to return to the well,” said CEO, Stuart Nicholls.

Breville Group (ASX:BRG) crashed after reporting a weak first half. The company posted a 2% revenue growth in H1 against a challenging consumer backdrop. Bottom line NPAT growth was 6.7%, after absorbing higher interest costs. Forecasted inventory and net debt reductions were both delivered. The company also generated an interim dividend of 16c cents per share (100% franked).

Macquarie Group (ASX:MQG) warned the market that its FY24 year to date (YTD) NPAT is substantially down on FY23 YTD. This was mainly driven by a decline in itsAsset Management and Banking and Financial Services segments. The bank is predicting a slower full year overall.

CSL (ASX:CSL) reported half year revenue of $8.05 billion, up 11% on pcp. NPAT $1.90 billion, up 17% on pcp. Guidance is reaffirmed – and FY24 NPAT is anticipated to be in the range of approximately $2.9 billion to $3.0 billion.

James Hardie Industries (ASX:JHX) reported Q3 global net sales of US$978.3 million. Net income was a record US$179.9 Million, up 39% on pcp. For the full year FY24, JHX expects adjusted net income to be in the US$165m to US$185m range.

Seek (ASX:SEK) experienced a drop in revenue by 5% in first half, with volume declines in ANZ and Asia resulting in EBITDA falling by 11%. “Although its earnings were bleak, it wasn’t all doom and gloom for the online employment marketplace as it completed its unified product and technology platform, marking a significant milestone for the company’s future growth,” said eToro market analyst, Farhan Badami.