Battle-scarred companies winning the fight – corporate profit season

CommSec has assessed the results of 131 companies from the ASX 200 index that reported half-year (HY) results to December 2011 (results for the six months to December) and 24 ASX 200 companies that reported full year (FY) results (results for the 12 months to December).

• Aggregate half-year profits rose by 5.5 per cent to $26.7 billion (in the previous full-year results to June, profits were up 31.8 per cent).
• Meanwhile the aggregate FY earnings were down by 45.2 per cent (largely reflecting write-downs by Caltex).
• Of the companies reporting half-yearly earnings, overall 111 companies or 85 per cent of companies produced a profit (previously 82 per cent produced a profit for the year to June) while only six of the FY companies didn’t report a profit.
• Only 61 companies (or 47 per cent) of the HY companies reported an improvement in profit (previously 62 per cent of companies reported an increase in profit for the year to June).
• Cash balances are being trimmed but there are mixed results. Of the half-yearly reporting companies, aggregate cash balances have fallen by 14 per cent between June and December. But it is by no means one-way traffic. Fifty-two per cent of companies cut cash balances while 48 per cent lifted their cash holdings. And excluding BHP Billiton, cash balances were actually up 7 per cent.
• The vast majority of ASX 200 companies paid dividends. Of the half yearly reporting companies, 79 per cent issued a dividend. Aggregate dividends were up 7 per cent on a year ago.
• Bloomberg has highlighted the mixed nature of the half-year earnings results with “negative surprises” ahead of “positive surprises” by 50 per cent to 36 per cent.

To read CommSec’s report on the corporate profit-reporting season, click here.