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Earnings season weekly review: CSL, NAB, Telstra, & Treasury Wine

Last week was a busy one with a number of Australia’s most popular companies releasing their respective results. Here’s a summary of four of the biggest results from last week:


Arguably the best result of the week belonged to this biotherapeutics company. CSL’s shares raced to an all-time high after it posted revenue of US$8,539 million and net profit after tax of US$1,919 million. In constant currency this was an 11% and 17% year on year increase, respectively, and at the upper end of its profit guidance range of US$1,880 million to US$1,950 million. A key driver of its growth was Immunoglobulins sales which rose 16% to US$3,543 million. Pleasingly, more solid growth is expected in FY 2020 even after accounting for the one-off financial headwind of transitioning to a new model of direct distribution in China. Management expects net profit after tax growth of 7% to 10% in FY 2020.

National Australia Bank Ltd (ASX: NAB) 

Last week this banking giant released a reasonably mixed third quarter update. During the third quarter NAB reported a 1% increase in cash profit compared to the prior corresponding period to $1.65 billion thanks to an improvement in its net interest margin. However, one negative that stood out was that the bank’s loans that are 90 days or more past due climbed 14 basis points to 0.85%. This is the highest level in almost two years. Outgoing chief executive Philip Chronican was pleased with the quarter. He said: “Against the backdrop of a challenging operating environment, including subdued home lending growth, our 3Q19 performance compared with the 1H19 quarterly average is solid.”

Telstra Corporation Ltd (ASX: TLS)

Another blockbuster result that was released last week was this telco giant’s full year result. In FY 2019 Telstra delivered a result that was in line with its guidance and market expectations. It posted a 3.6% decline in total income to $27.8 billion, a 21.7% drop in EBITDA to $8 billion, and a 39.6% reduction in net profit after tax to $2.1 billion. And as expected, it cut its dividend down to 8 cents per share. A good portion of Telstra’s earnings decline was due to the nbn. If you exclude the nbn headwind, underlying EBITDA would have decreased by only 4%. Next year the nbn headwind is going to get even worse, but management suggested investors look beyond this and focus on its underlying EBITDA, which is expected to grow by up to $500 million thanks to cost cutting.

Treasury Wine Estates Ltd (ASX: TWE) 

The Treasury Wine Estates share price stormed higher last week after the global wine company posted a strong full year result and provided positive guidance for the year ahead. Treasury Wines Estates posted a 17% increase in net sales revenue to $2,831.6 million and 25% increase in EBITS to $662.7 million. Whilst all its businesses performed well, the main driver of its EBITS growth was its Asia business which reported 43% EBITS growth to $293.5 million. Looking ahead, management reiterated its reported EBITS growth rate guidance of approximately 15% to 20% for FY 2020.

I think all four of those shares are worth considering at current prices along with these three buy-rated growth shares.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. 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 Scott Phillips.

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