The market is having a good day up 79. That compares to a 68 point rise the SFE Futures suggested this morning.

WALL ST UP 90 – Wall St. moved in a 237 point range and finished higher for the first time in four sessions despite the Fed lowering their 2008 economic growth forecasts and raising their inflation expectations. CPI higher than expected – The Labor Department said its Consumer Price Index increased by higher-than-expected 0.4% in January (expected +0.3%), and the Commerce Department said construction on new homes and apartments increased by 0.8% last month, but applications for building permits – a good measure of future activity – fell by 3%. The session started lower on reports from the Financial Times that KKR Financial Holdings had delayed repayments of its asset-backed commercial paper for the second time, but financials strengthened as the session went on – the sector closed up 1.6%. The NASDAQ put on 0.9% – Hewlett-Packard up 9% after it’s reported a 38% increase 1Q profit of $2.13 billion from $1.55 billion. The three major indices still have a long way to go to reach their highs set last year, the S&P 500 is down 7.4% this year, the Dow has lost 6.3% and the NASDAQ is down 12%.

Lots of earnings results today…

  • Telstra (TLS) – GREAT – Upgraded earnings and announced a better-than-expected net profit of $1.926bn (before significant items) from $1.704bn, above the $1.76bn analysts had expected. Revenue up 14.5% to $3.1bn. TLS up 13c to 482c.
  • Tabcorp Holdings (TAH) – GOOD – reported NPAT (before one-offs) of $261.9m, down 3%. Analysts expected $240.6m on average. Good cost control (unlike previous years) – down 0.7% compared to 1H07. TAH up 103c to 1500c.
  • Babcock & Brown (BNB) announced a better-than-expected 58% increase in FY profit to $643m. Analysts expected something around $592.3m. Final dividend of 33c compared to 21c last year. Good news – expects strong 2208 with net profit of at least $750m representing growth of 15%. BNB up 6.7% to 1635c.
  • Gloucester Coal (GCL) – NOT GOOD – 1H net profit down 54% to $5.2m from $11.3m. Revenue down to $62m. Interim divi of 5c, down from 8c. GCL down 35c to 777c.
  • Healthscope (HSP) – Operating profit (before one-offs) up 17% to $37.1m. After one-offs, profit down 67% to $15.7m from $46.8m. Sales up 17% to $726.2m. HSP to pay interim dividend of 9.5c up from 8.5c last year. HSP up 14c to 532c.
  • Qantas Airways (QAN) – GOOD – profit doubles to $617.6m from $307.5m last year. Much better than the $569.5m analysts had expected. On track to achieve at least 40% rise in FY earnings. QAN up 15c to 450c.
  • Santos (STO) – BAD – on the back of weaker-than-expected profit result. FY NPAT was 32% lower to $440.6m well below the $565m analysts had expected. STO down a big 9.7% to 1295c.
  • Brambles (BXB) – GOOD – 1H NPAT before significant items fell 1% to $US296.7m – just below the $US298.6m analysts had expected. BXB up 6.6% to 993c.
  • Adelaide Brighton (ABC) – SOLID – net profit up 12% to $113.9m. Credit Suisse expected $111.4m. ABC up 6.1% to 360c.
  • Iluka Resources (ILU) – Profit doubled to $51.1m – In line with expectations but forecasts big fall in 2008 earnings due to currency. (Around $10m-$20m) ILU down 7.1% to 406c.
  • PaperlinX (PPX) – 1H NPAT up 8% to $35.3m. Revenue down 4.2% to $3.78bn. PPX up 6c to 214c.
  • Downer EDI (DOW) – GOOD – net profit up 2% to $82.2m, analysts expected $74.8m. New CEP Geoff Knox took over Feb 1. DOW up a big 11% to 544c.
  • Macquarie Infrastructure Group (MIG) – OK– announced a net profit of $1.03bn, down 29% due to lost revenue because of the company’s demerger. MIG up 5c to 308c.

Other:

  • St. George Bank (SGB) has given a trading update – on track to achieve EPS growth of 10% – credit quality in its retail banking division remains strong. No exposure to subprime lending. It has $458m exposure to various Centro Property Group entities but no exposure to CNP. Also has a margin loan of $25m secured by MFS. SGB down 48c or 2% to 2414c.
  • CBH Resources (CBH) and Perilya (PEM) are in merger talks. CBH say, “These discussions are incomplete and, if and when any agreement is reached, the market will be advised”. PEM up 4% to 197c, CBH up 20% or 7c to 42c.

Results tomorrow include: Wesfarmers, Sims Group, Billabong, Lihir, Caltex, Minara.

Peter Fray

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