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Laggards
Mineral Resources slumped 8.1 per cent after it scrapped its first dividend in more than a decade as lithium prices remain low. Supermarket giant Woolworths fell 2.4 per cent for the second day. Full-year profit decline IT company NEXTDC fell 1.4% as its cautious earnings outlook disappointed investors as consumers shift to cheaper private labels.
Retail giant Wesfarmers fell 4.1 per cent after reporting a 2.7 per cent rise in profit to $2.56 billion for the year to June 30, but warned that sales growth at its Bunnings stores had slowed since the start of the new financial year due to generally weak construction activity.
Perpetual’s asset management business disappointed investors, sending its shares down 3.8%. Perpetual, which is set to be split up under a deal with private equity giant KKR, said it had “larger-than-expected net outflows” from its asset management unit, which will continue to be owned by Perpetual shareholders.
Overall, Perpetual posted a net loss of $472.2 million due to “significant items.” The company also announced that Chairman Tony D’Aloisio will retire from the board early next year and will be replaced by Vice Chairman Gregory Cooper.
Qantas shares rose 0.8 per cent after chief executive Vanessa Hudson announced full-year profits of $1.25 billion.Credit: Dominic Lorimer
Luxury fashion retailer Cettire continued to struggle as it encountered difficulties in auditing its financial accounts due to revenue recognition issues and a poor performance in the June quarter with almost no profit, and its shares plunged 20.3%.
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Sean Sequeira, chief investment officer at Eagle Asset Management Australia, said companies reporting poor results today were being severely punished in the market.
“The reason why the consumer staples sector stands out is because today we had a report from Wesfarmers, one of the largest consumer discretionary stocks, and while the report showed that both Bunnings and Kmart had performed relatively well, in terms of revenue growth, their performance will start to slow down over the coming period. Wesfarmers was very well supported by the market before this report, so some of that support has disappeared,” Sequeira said.
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“Those who didn’t meet expectations were completely devastated, I guess that’s one way to put it.
“The fact that the cash flow outlook for the mineral resource companies is not very positive and therefore they are not able to significantly reduce their debt, particularly in a period of commodity price pressure, presents the companies with more risk than I think market participants are comfortable with at the moment, so that hurts them.”
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Daily Quotes
“Our focus this year is on balancing serving our customers, employees and shareholders, while building a better, stronger Qantas Group. Restoring trust and pride in Qantas as the national airline is our top priority,” Qantas chief executive Vanessa Hudson said in a statement announcing its first full-year earnings.
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On the surface Nvidia, the chipmaker at the heart of a frenzy of activity and investment in artificial intelligence, has had another impressive performance.
The company’s third-quarter revenue was US$30.04 billion (A$44 billion), up 15% from a strong first-quarter result and 122% from the same period last year. The figure was well above the average analyst estimate of US$28.7 billion.
However, the group’s own forecast of third-quarter sales of $US32.5 billion ($A47.8 billion) – well above consensus estimates of $US31.9 billion – disappointed enough investors to send the company’s shares tumbling in after-hours trading, writes veteran business columnist Stephen Bartholomeusz.
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