Qld earnings season to be hit and miss for major companies
QUEENSLAND'S upcoming earnings season should reveal good news for some of the state's biggest companies including Suncorp, Flight Centre and Corporate Travel Management.
But Hunter Green Institutional Broking director Charlie Green warned there could be some "train wrecks" in an overall positive reporting season, which starts next week. That could include potentially disappointing results from Blue Sky and Aurizon.
"Overall it will be a solid season for Queensland companies," Mr Green said.
"Suncorp is having a cracking second half, while the travel twins of Flight Centre and Corporate Travel Management are both harvesting the golden age of travel. It is just so cheap to travel these days.
"Twenty years ago you could go to Malaysia for $2000 and it still costs $2000.
"Suncorp has had its own thing going on, but there have not been any monster cyclones (that could have hurt its insurance business)."
Morningstar analyst David Ellis said Suncorp chief executive Michael Cameron continued to restructure the business and improve operational efficiency.
"Ultimately, we expect increasing earnings growth," Mr Ellis said.
"The potential for further capital returns is reducing, but the balance sheet remains strong."
Morgan Stanley analysts said CTM's profit margins should rise significantly in coming years as it refocuses more on corporate travel, where it obtains half of its earnings. CTM earlier this month acquired Hong Kong-based Lotus Travel, which specialises in corporate travel.
Mr Green said it was not all good news for Queensland firms, with Blue Sky Alternative Investments, Aurizon and G8 facing challenging times.
Blue Sky has forecast a big hit to this year's net profit after a negative report about its various investments from US shortseller Glaucus.
Aurizon is in a battle with regulators on what it can earn from its lucrative coal network, while G8, Australia's largest for-profit early education provider, is facing increasing competition.
"Companies that are exposed to government regulation seem to be struggling," Mr Green said.
A downturn in the property sector could pose challenges for locally based buildings firms such as Villa World and Sunland.
"They are both big companies doing all right, but you can't piss into the thunderstorm forever," Mr Green said.
Broadbeach-based developer Villa World has flagged a lower full-year net profit due to planning delays at its projects in Melbourne.