Reporting season: what's the profit story?
The Australian December half profit reporting season hit full steam this week with 61 major companies reporting.
In the video below, Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital asserts that the profit story is critically important for the sharemarket outlook. He provides an update on US and Australian company profits and what this means for investors.
In Australia, earnings upgrades for resources stocks on the back of the rise in commodity prices has seen the consensus expectation for 2016-17 earnings growth rise. A stronger than expected result from Rio Tinto confirmed that the turnaround in resources sector profits is on track.
Across the rest of the market, profit growth has been largely driven by retailers, utilities, telecommunications and building materials companies. Key themes include a significant turnaround for resources companies; constrained revenue growth for banks and industrials; and an ongoing focus on dividends.
About the author
Shane Oliver, Head of Investment Strategy and Economics and Chief Economist at AMP Capital, is responsible for AMP Capital's diversified investment funds. He also provides economic forecasts and analysis of key variables and issues affecting, or likely to affect, all asset markets.
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