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The laggards
A2 Milk was the biggest large-cap decliner, with its shares plummeting 18.7 per cent after the company flagged challenging conditions for its infant formula market in China. It also forecast mid-single-digit revenue growth in FY25 – below analysts’ expectations – citing supply chain issues affecting sales.
Shares in bathroom products company Reece Group shed 3.9 per cent after the company reported year-on-year profit growth of 8 per cent in a tough market for home renovations.
Property giant Lendlease’s shares dropped 0.8 per cent after it reported a 10 per cent decline in revenue, to $9.4 billion, in 2023-24, and a post-tax loss of $1.5 billion.
The property group said it would focus on building up its core Australian operations with an emphasis on luxury residential projects, while it implements its strategy to sell overseas assets and simplify its business model.
Bluescope Steel shares fell 3.1 per cent as it reported a slide in profit after tax of $805.7 million.
BHP shares were 0.7 per cent lower, while Rio Tinto shares tracked down slightly, and Fortescue shares fell 1.9 per cent.
The lowdown
Tobias Yao, portfolio manager at Wilson Asset Management, said “absent short-term supply issues”, A2 Milk had delivered a strong set of results, and was simply experiencing “growing pains”.
He said negative outcomes in the company’s earnings report included pushing back a break-even target for A2’s US business by a year, and questions over what to do with $NZ968.9 million in cash.
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On Wall Street on Friday, the S&P 500 Index rose 0.2 per cent for a seventh straight gain and pulled back within 2 percentage points of its record high set last month. The Dow Jones Industrial Average and the Nasdaq Composite Index also each gained 0.2 per cent.
US treasury yields eased in the bond market after a couple of mixed reports on the US economy. One showed home builders broke ground on fewer projects last month than forecast, which threw some cold water on the market.
Optimism had been rising earlier in the week after a flurry of better-than-expected economic reports on everything from inflation to sales at US retailers.
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With AP
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