Earnings season can be a time of joy, but it can also be a time for disappointment. Every February (and August), the majority of companies listed on the ASX release statements detailing their revenue and earnings results which can either surprise to the upside, or dishearten those who hold their shares.
While there have been plenty of positive earnings reports issued by companies this week (including these three), there have also been a number which have not been up to scratch.
Chocolate maker Yowie Group Ltd (ASX: YOW) pleased the market recently when it announced it was bringing its flagship brand back to Australian shores. Unfortunately, it instead lost some favour with investors today when it provided an update on year-to-date sales. While the second-half will likely produce a stronger result than the first half (it said net sales are expected to grow as much as 90% for the full-year, compared to 70% in the first half), it reduced its fiscal 2017 target for markets outside the United States. It had originally expected to almost double its revenue.
Meanwhile, Genworth Mortgage Insurance Australia (ASX: GMA) shares closed almost 15% lower on Wednesday after it released its own full-year earnings update. The company’s gross written premium fell 24.8% to $382 million and its insurance margin fell to just 32.4% during the second-half, according to its presentation. Its underlying net profit result also fell almost 20% to $212.2 million.
Mobile Embrace Ltd (ASX: MBE) shareholders are likely also still feeling the effects of Tuesday’s market update. Firstly, the company said its earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half was $2.1 million, down from almost $4.1 million in the prior corresponding period. Revenue was also slightly lower. However, the company also provided a rather grim forecast for second-half results, which suggested that revenue will be even lower during that half compared to the six months just completed. The shares lost almost half of their value on the day that update was made.
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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.