We’re now through the heaviest week of February reporting season, and it’s telling that no clear theme or trend has really emerged so far to define the results.
Companies have demonstrated varying degrees of ability to adapt to the challenging economy, with interest rates probably peaking in the December half but the full impact of tightening still to be felt in the coming months.
Costs remain a focus for investors though. Companies that are doing well on them are being rewarded (for example, Chris Ellison’s Mineral Resources) and those that aren’t have been punished (Accent Group, Nine Entertainment Co, Medibank).
The quarterly update from US financial services company Block today illustrates the point. Shares in the owner of Australian-born buy now, pay later platform Afterpay, as well as the merchant terminal business Square, rocketed 16% after it beat market estimates on earnings. That’s the result of savage cost-cutting which, as Jack Derwin recently reported, has been depicted by staff as indiscriminate.
