AU Morning Wrap: Downer Plunges 13% on Guidance Cut; Woodside Climbs

Moomoo News AU wrote a column · Feb 27, 2023 07:33

G'day, mooers! Check out the latest news on today's stock market!
• S&P 500 tumbles as the Fed's preferred inflation gauge accelerates
• ASX 200 dropped 0.94%, dragged down by losses across the mining sector.
• Stocks to watch: Fortescue, Downer EDI, City Chic Collective
- Moomoo News AU

AU Morning Wrap: Downer Plunges 13% on Guidance Cut; Woodside Climbs

Wall Street Summary

US stocks slumped to their heaviest weekly loss of the year following hotter-than-expected inflation data. Friday's personal consumption report compounded fears interest rates will go higher this year than the market had previously priced in, and stay up longer.

The $S&P 500 Index (.SPX.US)$ sank 42 points or 1.05 per cent. The $Dow Jones Industrial Average (.DJI.US)$ shed 337 points or 1.02 per cent. The $Nasdaq Composite Index (.IXIC.US)$ gave up 195 points or 1.69 per cent.

The cost of goods and services in the US increased 0.6 per cent in January. The annual increase in prices was 5.4 per cent, up from 5.3 per cent in December. The rise in annual prices was the first in seven months.

The Federal Reserve's preferred measure of inflation, the core Personal Consumption Expenditures (PCE) price index, also increased by 0.6 per cent. Annual core inflation ticked up to 4.7 per cent from 4.6 per cent.

AU Market Watch

The $S&P/ASX 200 (.XJO.AU)$ dropped 0.94% in the opening minutes of trade, dragged down by losses across the mining sector.

Fortescue tumbled 7.2 per cent to $20.82 as it trades ex-dividend today. $BHP Group Ltd (BHP.AU)$ fell 2 per cent to $45.04 and dropped 1.5 per cent to $117.18 on lower iron ore prices.

Downer EDI plunged 11.6 per cent to $3.50 after cutting its full-year profit guidance again as it revealed details of its investigation into errors in its accounts.

$City Chic Collective Ltd (CCX.AU)$ declined 6.8 per cent to 54.5¢ as it reported a first-half statutory loss after tax of $27.2 million.

Woodside Energy advanced 1.7 per cent to $35.18 after reporting that its full-year net profit has more than trebled.

Stocks to Watch

$Adore Beauty Group Ltd (ABY.AU)$: Online makeup and beauty retailer Adore Beauty posted a $90,000 loss for the first half, down 105 per cent from a year earlier due to subdued revenue and cost inflation in freight and marketing.

Revenue fell 17 per cent in the post-COVID-19 lockdown period to $94 million, driven by a 27 per cent drop in new customers. Active customers fell by 9 per cent.

$TPG Telecom Ltd (TPG.AU)$: TPG Telecom reported a 1.5 per cent increase in service revenue of $4.4 billion for the 2022 financial year.

EBITDA was $2.1 billion and net profit after tax was $513 million, including the accounting gain on its tower assets sale.

The company declared a final dividend of 9¢ a share, taking total FY22 dividends to 18¢ a share.

$Kogan.com Ltd (KGN.AU)$: Kogan says its return to profitability is on track as its excess inventory issues have been largely resolved.

The company said it returned to profitability in January, recording its first positive adjusted EBITDA month since July 2022.

Kogan's inventories reduced to $98.3 million as of December 31, from $159.9 million on June 30.

The company's gross profit fell by 41.8 per cent in the period to $62.9 million. Profitability was impacted by the substantial right-sizing of inventory involving "unprecedented discounting", Kogan said.

Gross sales and revenue of $471.1 million and $275.6 million declined by 32.5 per cent and 34.3 per cent respectively.

$Downer EDI Ltd (DOW.AU)$: Downer EDI reported revenue of $6.1 billion for the six months ended December 31, up 2.9 per cent on the prior corresponding period.

Statutory EBITDA of $142.9 million was down 21.3 per cent, while its statutory EBITDA margin fell to 2.3 per cent, from 3 per cent.

$Woodside Energy Group Ltd (WDS.AU)$: Woodside reported a full year net profit after tax (NPAT) of $US6.5 billion, up 228 per cent on the prior corresponding period. Underlying NPAT soared 223 per cent to $US5.2 billion.

$Appen Ltd (APX.AU)$: Appen withdrew its financial year 2026 targets, pending the outcome of a strategy review that will be revealed in May. In the meantime, the company warned that its first-half 2023 EBITDA result would be "materially lower".

Its 2023 EBITDA outlook is under review. "Carrying over from 2022, we see a soft start to 2023," the AI business said.

Appen 2022 group revenue fell 13.1 per cent to $US388.5 million, and underlying EBITDA collapsed 85.8 per cent to $US11 million. Its statutory loss was $US239.1 million, including an impairment of $US204.3 million related to goodwill and intangibles.

$BWX Ltd (BWX.AU)$: BWX appointed former Coles executive Thinus Keeve as chief executive as the skincare company fell deeper into the red with a half-year net loss of $100.8 million.

Revenue for the six months to December 31 dropped 18 per cent to $79.7 million, and EBITDA swung to loss of $29.7 million from EBITDA a year earlier of $5.4 million.

BWX said gross margins were affected by a slow-moving inventory, sales mix issues and decreased marketing activity.

An interim dividend was not declared.

Trading Ex-div: $Hansen Technologies Ltd (HSN.AU)$, $Bapcor Ltd (BAP.AU)$, $Aurizon Holdings Ltd (AZJ.AU)$, $Adacel Technologies Ltd(Delisted) (ADA.AU)$, $McGrath Ltd (MEA.AU)$, $Beach Energy Ltd (BPT.AU)$, $Fortescue Ltd (FMG.AU)$, $Santos Ltd (STO.AU)$

Dividends paid: $HomeCo Daily Needs REIT (HDN.AU)$

Commodities

• Oil rose for the first time in eight sessions ahead of a reduction in Russian production this week. Moscow announced it will slash output by 500,000 barrels a day from March 1 in retaliation for western price caps.

Brent crude settled 95 US cents or 1.2 per cent higher at US$83.16 a barrel. The US benchmark firmed 1.2 per cent to US$76.32.

• Gold for April delivery sealed a fourth straight losing week with a decline on Friday of US$9.70 or 0.5 per cent to US$1,817.10 an ounce. Friday's close was the yellow metal's weakest since December 28. The NYSE Arca Gold Bugs Index eased 0.3 per cent.

• Iron ore retreated. The most-traded May ore on the Dalian Commodity Exchange ended daytime trade 0.2 per cent lower at 909.50 yuan (US$131.19) a tonne. For the week, ore prices gained roughly 3 per cent.

Source: Dow Jones Newswires, AFR

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