Earnings Reporting – Results update for these eight stocks

Sonic Healthcare Ltd

SHL Details
Currency exchange rate movements in H1 FY17 affected the top line: Sonic Healthcare Ltd (ASX: SHL) has reported the revenue growth of 5% in the first half of 2017 and underlying EBITDA growth of 5.5% on a constant currency basis. However, the statutory result was affected by the currency exchange rate movements. Moreover, the Australian Laboratory business was impacted by the specimen collection infrastructure costs, while the imaging earnings was impacted by low market revenue growth. Medical Centre business was impacted by the Medicare fee indexation freeze for general practice implemented by the Government. Additionally, SHL expects FY17 EBITDA growth of approximately 5% on a Constant Currency basis (applying constant currency FY 2016 FX rates) over the FY 2016 underlying EBITDA of A$876M, excluding the acquisitions in the period. In addition, SHL has announced accretive acquisitions in Germany and the USA and hospital partnerships in the USA.
 
H1 FY17 Financial Performance (Source: Company Reports)
 
Meanwhile, SHL stock has fallen 9.1% in the last six months as on February 17, 2017, and still trading at a high level. We give an “Expensive” recommendation on this dividend yield stock at the current price of – $ 21.42
 

SHL Daily Chart (Source: Thomson Reuters) 

Commonwealth Bank of Australia

CBA Details
Fall in cash net interest margin in H1 FY17: Commonwealth Bank of Australia (ASX: CBA) reported record cash net profit after tax (NPAT) of $4.91bn for the first half of the 2017 financial year, indicating a 2% increase from $4.81bn for the same period in the previous financial year. The statutory NPAT grew 6% to $4.9bn from $4.62bn and included a one-off gain on investment sale and amortisation expense. CBA declared a fully franked interim dividend of $1.99 a share, which is a 1 cent or 0.5% rise over last year. CBA stock has risen over 15.3% in the last six months as on February 17, 2017 and currently placed near 52 week high levels. We believe that the stock is “Expensive” at the current price of – $ 85.91
 

CBA Daily Chart (Source: Thomson Reuters) 

Wesfarmers Ltd

WES Details
Started a strategic review of Officeworks: Wesfarmers Ltd (ASX: WES) stock has risen over 4.16% in the last three months as on February 17, 2017; while for H1 2017, the group has reported a 13.2% growth in a net profit after tax (NPAT) of $1,577 million as compared to the prior corresponding period. The operating cash flows increased $244 million to $2,648 million, and the cash realization ratio improved to 119.7 per cent. Moreover, the net financial debt in H1 FY17 are largely in line with the prior corresponding period, despite the debt-funded acquisition of Homebase in February 2016. 

H1 FY17 Financial Performance (Source: Company Reports)
 
Additionally, WES has started a strategic review of Officeworks and the business will be retained if divestment options do not meet WES valuation hurdle. Looking at the prospects and trading levels, we maintain our “Expensive” recommendation on the stock at the current price of – $ 42.34
 

WES Daily Chart (Source: Thomson Reuters) 

Domino's Pizza Enterprises Ltd

DMP Details
Upgraded guidance for 2017: Domino's Pizza Enterprises Ltd (ASX: DMP) reported its half year results ending January 01, 2017, with 9.4% growth in group’s Same Store Sales while EBITDA rose 33.6% and NPAT rose 30.8%. The group has revised both the underlying EBITDA and NPAT guidance for the full Year 2017 and now expects a 32.5% growth. On the other hand, concerns persist over the payments of Domino’s franchisee employees. The group has also slowed down on negotiations. DMP stock has fallen over 29.96% in the last six months as on February 17, 2017, however, the stock still looks “Expensive” at the current price of – $ 55.01
 

DMP Daily Chart (Source: Thomson Reuters)

Villa World Ltd

VLW Details
Profit in H1 2017 is within the guidance range: Villa World Ltd (ASX: VLW) has reported the statutory net profit after tax of $19.6 million in the H1 2017 as compared to a net profit after tax of $20.4 million for H1 2016. However, this is within the guidance range of $19.5 - 21.4 million given by the company with sales at certain Victorian land and housing projects carried forward into 2H17. Moreover, VLW has increased the FY17 guidance for the profit after tax of $37.5 million, which represents the growth of 11% over FY16. Meanwhile, VLW stock has risen 9.55% in last three months as on February 17, 2017. We give a “Hold” recommendation on the stock at the current price of – $ 2.44
 

VLW Daily Chart (Source: Thomson Reuters) 

Tatts Group Ltd

TTS Details
Fall in H1 FY17 statutory after tax profit: Tatts Group Ltd (ASX: TTS) delivered a 16.5% fall in the H1 FY17 statutory after tax profits to $122.8 million, including the $10.4 million in merger costs compared to $147.0 million in H1 FY16. The result was impacted by both the challenge of cycling over last year’s all-time record Powerball and Oz Lotto jackpot run, and the continuing investment required for UBET to sustain its position in a hypercompetitive sector. Trading at an unreasonable P/E, we give an “Expensive” recommendation on the stock at the current price of – $ 4.05
 

TTS Daily Chart (Source: Thomson Reuters) 

South32 Ltd

S32 Details
Outstanding cash flow: South32 Ltd (ASX: S32) has reported the statutory profit of US$620M in H1 FY17 as compared to the loss of US$1749M in H1 FY16. S32 has restarted 22 pots at South Africa Aluminum and opportunistically has increased manganese ore production. 

H1 FY17 Financial Performance (Source: Company Reports)
 
Moreover, S32 has posted a 197% improvement in free cash flow to US$626M, including the distributions from equity accounted investments. Meanwhile, S32 stock has risen over 29.3% in the last six months as on February 17, 2017, and we maintain a “Hold” recommendation on the stock at the current price of – $ 2.64
 

S32 Daily Chart (Source: Thomson Reuters) 

Origin Energy Ltd

ORG Details
Solid operational performance in H1 FY17: Origin Energy Ltd (ASX: ORG) has reported the statutory loss of $1.68 billion in the H1 FY17, principally due to an impairment charge of $1.9 billion. However, the Underlying EBITDA has increased $277 million or 32% to $1.15 billion, due to the solid operational performance of the business. Additionally, the FY2017 Underlying EBITDA guidance range has improved from $2,450 million to $2,615 million, subject to the market conditions. Meanwhile, ORG stock has risen 17.64% in the last six months as on February 17, 2017 and we give a “Hold” recommendation on the stock at the current price of – $ 6.87
 

ORG Daily Chart (Source: Thomson Reuters)

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