As the market ponders the impact of last night’s Federal budget, the corporate reports continue, with Commonwealth Bank of Australia pleasing investors this morning with a 13% rise in third-quarter cash profit, heightening expectations of a record full-year profit.
CommBank, Australia’s biggest home loan lender, said cash profit came in at $1.7 billion for the quarter, up from $1.5 billion in the previous corresponding period, and matching expectations. The result was helped by a fall in bad-debt charges.
Chief Ralph Norris said while the Australian economy “continues to perform relatively well, consumer and business confidence remains fragile, resulting in muted system credit growth.”
“We continue to expect a gradual improvement in operating conditions through calendar 2011, as the economic recovery strengthens and system credit growth rebounds,” he added.
CBA, which is the last of the big four banks to report, saw its shares rise on the announcement to as high as $52.84. At 11.10 AEST, its shares were trading 0.52% higher at $52.47, underperforming a rise in the benchmark index.
Myer reports challenging but improving retail environment, DJs lifts as reaffirms profit guidance
Across to the retail sector, and department store giant Myer has reported a 2% fall in third-quarter sales to $675 million, with like-for-like sales down 3.1% despite an improvement in the retail environment.
“While the last three months continued to be characterised by a cautious consumer with an increased propensity to save, we have seen an improvement in the retail environment,” chief Bernie Brookes said.
“There was a moderate and steady improvement in sales as the third quarter progressed and we had a pleasing mid-season sale, which was ahead of last year.”
The newly listed company says while the summer’s natural disaster had stripped $6 million from its April quarter result, it is confident of meeting full-year earnings guidance of a 5% fall in last year’s net profit after tax of $169 million.
Its upmarket rival, David Jones, has also reaffirmed its full-year guidance despite a fall in third-quarter sales.
DJs chief Paul Zahra said while quarterly trading conditions were difficult, the late Easter and colder weather had helped its April sales.
Myer shares were up 0.63% to $3.19 at 11.10 AEST, while DJs shares were up 2.92% to $4.58, having risen to $4.62 in earlier trade.
Market lifts after shock-free budget
The Australian sharemarket has opened the day higher, lifted by a shock-free budget and stronger base metals prices.
“Last night’s budget looks to be of very little interest for the equity market as most of the policies were already pre-released,” IG Markets analyst Ben Potter said.
“There was nothing new in relation to the carbon tax or possible changes to the negative gearing tax laws; these were the main concerns for the equity market,” he said.
“However, it’s worth noting that the Government raised its GDP outlook to 4% in 2011-12.”
At 11.17 AEST, the benchmark S&P/ASX200 index was 0.84% higher at 4765.5, while the broader All Ordinaries index was 0.83% higher at 4843.7.