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The end of the latest reporting season included a rallying in the market, which went against the grain as downgrades outweighed upgrades and mounting costs were highlighted by many listed companies.
Many listed retail companies have yet to report, while Fonterra is scheduled to report tomorrow.
To a backdrop of continued deterioration in business confidence, brokers at Forsyth Barr and Craigs Investment Partners both noted rising costs for companies, and also some inconsistencies in market reaction following the reports of almost 40 companies during the past month.
Forsyth Barr broker Lyn Howe said the reporting season saw outlook statements which were more positive than anticipated, but overall downgrades outweighed upgrades and were higher than recent history.
"Certainly, we wouldn't have anticipated the market rally that has accompanied results," she said.
Of 37 companies, 16 posted downgrades, 11 were unchanged and 10 posted upgrades.
On measuring the three-day post result reaction, of share price reaction against the market, 10 companies outperformed on price, 10 were in line with expectations, and 12 underperformed.
Mrs Howe said the company downgrades reflected higher costs with revisions less impacted, which posed questions for expected full year 2020 earnings.
"The reporting season outcomes didn't justify the advance in the market," Mrs Howe said.
Craigs Investment Partners broker Peter McIntyre took a wider view, including both the NZX and ASX companies performance in his review of the reporting season.
He said the season was "not as eventful" as previous seasons, but there was plenty for investors to ponder.
While both the New Zealand and Australian markets outperformed their respective benchmarks, Mr McIntyre saw several key trends emerging, including disappointing outlooks, pressure on margins and also regulatory pressures.
"The outlook statements from some companies often disappointed," he said.
Companies on both sides of the Tasman reported solid results overall, indicating businesses remained in good shape, he said.
However, a number of outlook statements disappointed the market, mainly from Australia.
"We'll hear more from many local [New Zealand] companies through the upcoming annual general meeting season," he said.
Companies with bearish outlook statements included Fletcher Building, Freightways, Adelaide Brighton, Ansell, AGL Energy, Ramsay Health Care and James Hardie, Mr McIntyre said.
"A large number of companies cited pressure on margins due to higher input costs such as energy, transport, raw materials and labour," he said.
Companies which flagged higher costs included Fletcher Building, from raw materials, labour, and energy; Pact Group, energy and raw materials; Brambles, transport and lumber; Amcor, from resin costs; James Hardie, in freight and pulp; Freightways, labour and fuel; Air New Zealand, from fuel; and Rio Tinto, fuel and labour, he said.
Mr McIntyre also saw "regulatory pressures" come through in a number of results.
"For example, the Australian banks and AMP have seen considerable increases in compliance expenses, which have hurt margins," he said.
Another trend was the decline in house prices in major Australian cities, while in Auckland they had "flat-lined".
"This is beginning to filter through to companies exposed to the housing cycle," he said.
He noted also the New Zealand retirement operator results were showing signs that the tailwind from rising property prices was "starting to dissipate".