NAB's Earnings Flop | ASX Extends Losing Streak

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Equity Espresso
February 19, 2025 • Estimated Reading Time: 12 minutes

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Welcome to Equity Espresso’s Market Recap.

The Australian sharemarket extended its losing streak to three days as disappointing earnings from major banks and energy companies, coupled with profit-taking, dragged down the market. The S&P/ASX 200 index closed 0.73%, shedding 61.8 points to settle at 8,419.2. The index has declined by 1.6% so far this week, with only five out of the eleven sectors finishing in positive territory today.

The Financials (-2.00%) sector was one of the hardest hit, with National Australia Bank one of the worst performers, plummeting 8.13% to $36.30 from near-record highs after its cash earnings fell short of expectations, slipping by 2%.

The lacklustre results from NAB also impacted the other major banks, with CBA (-2.25%) and ANZ Group (-1.57%) also falling. The banking sector has experienced a 4.8% decline over the past five days after a series of disappointing earnings reports from banks such as Westpac and Bendigo Bank.

The Energy (-2.34%) sector was the day’s worst performer after Santos (-4.50%) shares dropped after reporting a 40% fall in full-year profits due to lower oil and gas prices. Woodside Energy (-1.96%) and Whitehaven Coal (-2.81%) also finished the day lower.

ASX Company News

  • Cleanaway Waste (-0.37%) reported a 12.2% increase in EBIT to $195.2 million for the first half of 2024-25. The company raised its interim dividend to 2.8¢ per share and is on track to achieve its full-year EBIT forecast.

  • Corporate Travel (+10.27%) reported a 33% drop in half-year profit to $38.7 million and cut its interim dividend to 10¢ as European operations struggled. Despite reducing the share buyback to $52.3 million, the company expects stronger second-half performance with 10% growth outside Europe, though European revenue may fall 24%.

  • Fletcher Building (+7.42%) reported deteriorating first-half results, with revenue falling 7% to $3.6 billion and net loss widening to $134 million.

  • Goodman Group (-) announced a $4 billion capital raise to expand its global logistics portfolio and data centres business. The company reported an 8% increase in operating profit to $1.2 million for the first half of 2025, with data centres now representing 46% of its $13 billion workbook.

  • James Hardie (+3.12%) reported a 15% decline in quarterly profit to $US154 million and a 3% drop in sales to $US953 million, with EBIT falling 9% to $US206.1 million.

  • Light & Wonder (+9.64%) says it's in discussions to purchase Grover Gaming and G2 Gaming's charitable gaming operations for $850 million in cash.

  • Mineral Resources (-20.72%) shares are in free-fall, reporting a $807 million half-year loss, significantly worse than analysts' expected $400 million, and suspended its interim dividend. The company also reduced its FY25 iron ore shipment guidance by up to 25% amid challenging commodity prices and weather conditions.

  • NAB (-8.13%) shares plunged after reporting a 2% decline in quarterly earnings to $1.74 billion, impacted by higher funding costs and intense competition. Despite modest growth in deposits and lending, the bank's net interest margin contracted.

  • Stockland's (-3.72%) half-year net profit jumped to $245 million from $102 million, driven by a $105 million property revaluation. Despite funds from operations falling 5.6% to $251 million on lower housing settlements, the company maintained its full-year settlement guidance.

  • The Lottery Corporation (+3.05%) maintained its 8¢ interim dividend despite revenue falling 5.6% to $1.8 billion and earnings dropping 7.4% to $369.7 million, with profit down 9.9% to $175.7 million due to below-average jackpot outcomes.

  • Ventia Services (+7.00%) reported a 16% increase in annual profit to $220.2 million and announced a $100 million buyback while defending against ACCC price-fixing allegations related to Defence contracts.

ASX Indices

ASX Sector Performance

Wall Street

The S&P 500 (+0.24%) reached a new record close on Tuesday, while the Dow Jones (+0.02%) edged slightly higher, as did the Nasdaq (+0.07%). The major indexes fluctuated throughout the session before turning positive in the final minutes of trading. Markets showed resilience ahead of Wednesday's Federal Reserve minutes release, which will provide insights into January's decision to maintain interest rates.

Commodity-linked sectors led gains, with strong performances in Energy (+1.37%) and Materials (+1.23%), while semiconductor stocks rallied on acquisition rumours surrounding Intel (+16.06%) and continued momentum in Super Micro Computer shares.

Constellation Brands (+3.95%) shares rose after Berkshire Hathaway disclosed a $1.2 billion stake in the alcohol company. Nike (+6.23%) shares jumped following the announcement of NikeSKIMS, a new athletic wear collaboration with Kim Kardashian's Skims brand, set to launch its first collection of apparel, footwear, and accessories this year.

U.S. Indices

Fear & Greed Index

Economic Data

  • The Reserve Bank of New Zealand (RBNZ) lowered its official cash rate by 50 bps to 3.75% during its February 2025 policy meeting, which was in line with expectations.

  • China’s new home prices in 70 cities declined by 5.0% year-on-year in January 2025, easing from a 5.3% drop in the previous month and marking the smallest decline since last July.

  • Japenese Exports rose 7.2% YoY to ¥7,863.75 billion in January 2025, picking up from a 2.8% growth in December while pointing to the fourth month of gain.

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