Earnings season rewards investors

New Zealand shares edged higher today, rounding out the second week of major earnings with a 2 percent weekly gain.

Friday, February 21st 2020, 6:00PM

by BusinessDesk

The S&P/NZX 50 Index increased 8.48 points, or 0.07 percent, to 12,073.34. Within the index, 17 stocks gained, 30 fell, and three were unchanged. Turnover was $138.8 million.

Yesterday, the index broke through 12,000 for the first time. However, US stock indices fell today, with the S&P 500 and Dow Jones Industrial Average both down 0.4 percent, and the Nasdaq down 0.7 percent.

The weak lead from Wall Street left investors feeling more subdued – although much of the focus was still on local earnings news.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said it had been a solid earnings season, in line with expectations.

“We haven’t seen any particularly disappointing results, even Fletcher is heading in the right direction,” he said.

Ebos Group led the market, up 3.5 percent at $25 on a lighter volume of 150,000 shares, continuing to gain after yesterday reporting a first-half profit of $81.7 million, up from $67 million a year earlier.

The company also shrugged off news that Amazon had registered the "Amazon Pharmacy" brand in Australia early this year.

Fisher & Paykel Healthcare rose 3.4 percent to $26.05 on a volume of 800,000 shares. Today the company lifted its full-year earnings guidance as it benefits from increased demand from the covid-19 virus outbreak.

Chief executive Lewis Gradon said there had strong growth in the hospital product group, with increased demand from China. It now expects full-year operating revenue to be approximately $1.2 billion, up from $1.19 billion.

Genesis Energy today reported a 16 percent decline in first-half operating earnings and trimmed the top end of its full-year guidance by $10 million.

The company also announced it was in talks to buy the output of a 300-megawatt solar farm proposed for northern Waikato, which chief executive Marc England told BusinessDesk would have “nice synergies” with the gas- and coal-fired generation Genesis operates at Huntly.

The share price rose 2.2 percent to $3.25 on a volume of 615,000 shares.

Other energy stocks came under pressure today. Meridian Energy was down 1.8 percent at $5.545 on a volume of 1.3 million shares, and Vector fell 1.8 percent to $3.34. Contact Energy decreased 0.7 percent to $7.55, and New Zealand Refining declined 2 percent to $1.49.

Davies said the other companies had a very different mix of energy sources than Genesis, so were apt to move independently.

Precinct Properties New Zealand continued to gain after reporting strong earnings, rising 1.6 percent to $1.925 on a volume of 1.3 million shares.

Fletcher Building fell 1.3 percent to $5.52, although it's still up 6.6 percent since reporting on Wednesday.

Pushpay Holdings fell 4.3 percent to $4.45, following the weak lead from Wall Street and posting the biggest decline on the day.

Skellerup Holdings declined 0.4 percent to $2.24. Chief executive David Mair told BusinessDesk he was “looking hard” to acquire a manufacturing business in the US to side-step increased costs from tariffs imposed on imports from China

Among other stocks trading on volumes of more than a million shares, Oceania Healthcare declined 0.8 percent to $1.23, Spark New Zealand fell 0.2 percent to $4.83, Kiwi Property Group was unchanged at $1.55, and Auckland International Airport rose 0.6 percent to $8.65.

Tags: Market Close