How did the ASX share price respond last earnings season?

With ASX Ltd due to report its FY2021 earnings tomorrow, we check how the market operator fared last earnings season?

| More on:
young boys open mouthed in front of shares graph

Image source: Getty Images

It’s easy to forget sometimes, but the ASX share market is run by a company. That company is ASX Ltd (ASX: ASX). And it reports its FY2021 earnings tomorrow morning. The ASX share price is having a day in the green today in anticipation, up 0.49% at the time of writing to $81.79 a share.

So as we await its results, let’s take a look at how the ASX share price responded to its last earnings report back in February.

So back on 11 February, ASX reported a 3.4% increase in operating revenues to $470.5 million for the 6 months to 31 December 2020. That came with a 1.3% bump in earnings. Even so, ASX also revealed that its net profit after tax (NPAT) came in at $241.8 million. This was down 3.4% from the corresponding period of FY20.

That led ASX to cut its interim dividend by the same margin – 3.4% – to $1.124 per share.

The ASX saw a 50% increase in new listings from the prior period. Yet even so, it also saw a decline in its derivatives and over-the-counter (OTC) markets.

Here’s some of what Dominic Stevens, ASX Managing Director and CEO, said at the time:

As expected, the challenges arising from COVID were felt during the half and are likely to continue for at least the short term… ASX remains well positioned to serve Australia’s financial markets and our shareholders…

After these results were released, the ASX share price reacted poorly at the time. It lost around 2% when trading opened following the release.

So given the “challenges arising from COVID” have certainly not gone away, it will be interesting to see how they have continued to affect ASX’s operations over the second half of the 2021 financial year when the company reports tomorrow.

About the ASX share price

The ASX Ltd share price has had a rather interesting year. It is currently up 13.65% year to date in 2021. That’s eerily similar to the year to date gains of the S&P/ASX 200 Index (ASX: XJO), which is up 14% over the same period.

However, that’s where the similarities end. ASX shares are currently down 5% over the past 12 months whereas the ASX 200 is up 22.7% over the same period.

At the current ASX Ltd share price, the company has a market capitalisation of $15.84 billion, a price-to-earnings (P/E) ratio of 32.3, and a trailing dividend yield of 2.87%.

Should you invest $1,000 in ASX Ltd right now?

Before you consider ASX Ltd, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ASX Ltd wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ ASX Shares