Earnings Reporting for these Six Stocks

Rio Tinto Ltd

RIO Details
Optimizing the portfolio in FY 16: Rio Tinto Ltd (ASX: RIO) stock has risen 30.41% in the last six months as on February 10, 2017; and in 2016, the group delivered shareholders returns of $3.6 billion. Moreover, RIO is optimizing the portfolio with disposal worth $1.3 billion announced or completed in 2016 and up to $2.45 billion announced to date in 2017. The company is also investing in three major growth projects in bauxite, copper and iron ore. RIO generated strong operating cash flow of $8.5 billion and underlying earnings of $5.1 billion as per its full year 2016 results. 

FY 16 Financial Performance (Source: Company Reports)
 
Further, $1.6 billion of pre-tax sustainable operating cash cost improvements were achieved. The group’s net debt has now reduced to $9.6 billion. RIO also announced for share buy-back of $0.5 billion in Rio Tinto plc shares over the course of 2017. We give a “Buy” recommendation on the stock at the current price of – $ 68.32

 
RIO Daily Chart (Source: Thomson Reuters) 

BWX Ltd

BWX Details
Positive guidance for FY17: BWX Ltd (ASX: BWX) has reported 36.4% growth in the revenue to $37.5m in 1H 17 while the NPAT grew 30.2% to $8.2 million as compared to the first year of 2016. Solid growth in the sales of Sukin branded product during the period contributed to this performance. Moreover, BWX have been positioning themselves to grow the export markets as the export sales grew 115.7% and the company continues to implement and initiate the long-term strategies for markets like UK, China and Canada.
 

1H FY17 Financial Performance (Source: Company Reports)
 
BWX reiterated their forecast of 30% growth in FY17 EBITDA, assuming stable market and economic conditions during the period and no corporate actions or transactions. The gross margin is expected to be maintained about 62% in FY17. We give a “Speculative Buy” recommendation on the stock at the current price of – $ 5.02

 
BWX Daily Chart (Source: Thomson Reuters) 

AGL Energy Ltd

AGL Details
Impairments pressure: AGL Energy Ltd (ASX: AGL) has reported Statutory Profit after tax of $325 million in 1H 17, which is $774 million more than the prior corresponding period. But the group witnessed the impact of impairments and movements in the fair value of financial instruments in the prior corresponding period. However, the Underlying Profit after tax grew 4% to $389 million as a result of strength in the wholesale electricity market and the ongoing delivery of AGL’s cost reduction programs, offsetting a decline in gas margins. Moreover, AGL expects the Underlying Profit after tax for FY 17 to be within the upper half of its guidance range of $720 million to $800 million, subject to normal trading conditions for the remainder of the financial year. On the other hand, the group’s net tangible asset backing per share fell 0.1% to $7.23 during the period. AGL stock has risen 26.01% in the last six months as on February 10, 2017, and is now trading at higher levels. We give an “Expensive” recommendation on the stock at the current price of – $ 24.48

 
AGL Daily Chart (Source: Thomson Reuters) 

Class Ltd

CL1 Details
Outstanding top line increase: Class Ltd (ASX: CL1) has reported a 28% increase in profit to $3.606 million in 1H FY17 on the back of a record increase in billable portfolios. There is a 33% growth in EBITDA.  Further, the total revenue for the half year grew by 31% as compared to the same period last financial year due to the record 17,775 increase in billable portfolios to 130,216 portfolios, including 127,806 billable Self-Managed Super Funds (SMSFs) on the Class Super product. We give a “Speculative Buy” recommendation on the stock at the current price of – $ 3.12

 
CL1 Daily Chart (Source: Thomson Reuters) 

SKYCITY Entertainment Group Ltd

SKC Details
Weak revenue for 1H 17: SKYCITY Entertainment Group Ltd (ASX: SKC) has reported a fall of 5.8% in the revenue in 1H FY17 while the reported NPAT grew 18% to $83.8m. There is a solid growth in combined NZ properties, with Auckland improving significantly in 2Q17. However, there is reduced IB turnover and challenging trading conditions in Darwin and a weaker Australian dollar. Moreover, for the remainder of FY 17, SKC expects to continue to optimize operating performance of all business segments, particularly Auckland and IB, while progress on NZICC and Hobson St Hotel projects seems to be on-time and on-budget. 

1H FY17 Financial Performance (Source: Company Reports)
 
SKC stock has fallen 20.6% in the last six months as on February 10, 2017, and we believe the pressure might continue. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of – $ 3.69
 
SKC Daily Chart (Source: Thomson Reuters) 

AMP Ltd

AMP Details
Reported Loss in FY 16: AMP Ltd (ASX: AMP) has reported the net loss of A$344 million in FY 16 as compared to net profit of A$972 million in FY 15. The underlying profit is A$486 million as compared to A$1,120 million in FY 15 due to the actions announced in October 2016 to stabilize Australian Wealth Protection. There is an A$415 million loss in Wealth Protection due to the negative claims experience and capitalized loss. However, the business is being given attention to attain a stabilized state and the group has indicated for capital release after the reinsurance and Part 9 initiatives. Moreover, AMP intends to return up to A$500 million to shareholders through on-market share buy-back which was said to start from first quarter of 2017. Looking at the volatility, we believe that the stock is “Expensive” at the current price of – $ 5.25

 
AMP Daily Chart (Source: Thomson Reuters)

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