The Sonic Healthcare Limited (ASX: SHL) share price is charging higher on Thursday.

In morning trade, the healthcare company’s shares are up 9% to $31.74.

This follows the release of Sonic Healthcare’s half year results.

Sonic Healthcare share price jumps despite profit decline

• Total revenue down 14% to $4,082 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) down 40% to $920 million
• Net profit down 54% to $382 million
• Fully franked interim dividend increased 5% to 42 cents per share

What happened during the half?

For the six months ended 31 December, Sonic Healthcare reported a 40% decline in total revenue to $4,082 million. This reflects a 72% decline in COVID-19 revenue to $379 million, which offset a 9% lift in base business revenue to $3,703 million.

When compared to its performance in the first half of (pre-pandemic) FY 2020, revenue would have been up 22%.

It was a similar story for Sonic Healthcare’s earnings, which fell heavily year over year but rose strongly compared to pre-pandemic times. The company’s net profit of $382 million was down 54% over the prior corresponding period but up 50% from the first half of FY 2020.

Despite the year over year profit decline, Sonic Healthcare has maintained its progressive dividend policy and increased its interim dividend by 5% to a fully franked 42 cents per share.

How does this compare to expectations?

Given the Sonic Healthcare share price performance today, you might expect that this result was ahead of expectations.

However, the company’s sales and net profit were actually 1% below consensus estimates.

Management commentary

Sonic’s CEO, Dr Colin Goldschmidt, described the company’s profit as ‘amazing’. He commented:

At face value, Sonic Healthcare’s result for the half-year shows declining revenue and earnings as a result of a dramatic reduction in revenue from COVID-19 related services against the same period in the prior year. Taking a longer-term view, our net profit for the half-year is an amazing 50% higher than in the most recent pre-pandemic comparable period, being H1 FY 2020.

The reduction in COVID related revenues also tends to mask the performance of our base business, which remains strong and is gaining further momentum. Base business revenue grew 6% organically versus H1 FY 2022 and 8% versus H1 FY 2020. For the month of January 2023 base business organic growth for the group was 10% versus January 2020. I am particularly pleased with the growth momentum of our Australian Pathology business, where growth in January was 16% versus January 2020. Comparing our own Australian base business Medicare billings to the national Medicare data over the last decade shows that Sonic has been consistently growing market share organically.

Outlook

No guidance has been provided for FY 2023. However, the company did advise that revenue was up 10% in January compared to the same period in 2020.

Furthermore, management appears positive on the outlook for the base business. Dr Goldschmidt added:

We are well-positioned to capitalise on the accelerating trend towards higher value tests and modalities in both laboratory medicine and radiology. We expect ongoing strong growth in genetic testing, including prenatal tests, and through exclusive or limited provider tests such as ThyroSeq, Oncotype DX, microbiome testing and others. Our base business organic growth is assisted by strong underlying industry drivers and is expected to be enhanced by post-pandemic catchup testing.

With the worst of the pandemic seemingly now behind us, we look forward to continuing to provide world-leading medical diagnostic services to our patients and their physicians.

And with the company ending the period with available liquidity of $1.5 billion, management revealed that it is progressing several acquisition opportunities. This could be what has got investors excited and boosted the Sonic Healthcare share price today.

The post Sonic Healthcare share price surges 9% on ‘amazing’ profit result appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Magellan Financial Group Ltd (ASX: MFG) share price is in the green on Thursday. 

Shares in the S&P/ASX 200 Index (ASX: XJO) funds manager closed yesterday trading for $9.45 and are currently swapping hands for $9.55, up 1.1%.

This comes following the release of the company’s half-year results for the six months ending 31 December (1H FY23).

Read on for the highlights.

Magellan share price gains despite cratering profits

• Adjusted revenue and other income of $209 million, down 49% from $384 million in 1H FY22
• Adjusted net profit after tax (NPAT) of $98 million, down 60% from $319 million in the prior corresponding half-year
• Average funds under management (FUM) $53.8 billion, decreased 52%
• Interim dividend of 46.9 cents per share, 85% franked, down from 110.1 cents per share in 1H FY22

What else happened during the half year?

Magellan said it continued to progress with simplifying its business and organisational structure to support its long-term strategy.

The company reaffirmed its fund management operating expenses in the range of $125 million to $130 million.

Of the 10 million Magellan shares authorised for the on-market share buyback, its bought 4.2 million to date at a cost of $46.7 million.

The company also noted its Energy Transition Investment Strategy is set to launch to institutional clients this month, while it’s now “well progressed” on the Airlie Small Companies Fund.

What did management say?

Commenting on the results that are seeing the Magellan share price lift today, CEO David George said:

Magellan has experienced a period of accelerated and substantial change in recent times. We now have a well-defined and actionable five-year strategy which builds upon the qualities that have made us successful, while further diversifying the business to deliver sustainable growth and revenue.

George added that over the six-month period, Magellan had taken “key first steps in delivering on our five-year target of $100 billion in funds under management by 2027”.

What’s next?

Looking at what could impact the Magellan share price down the road, the company expects “challenging market conditions and volatility” to continue, with higher interest rates and inflationary pressures to persist.

However, Magellan sees opportunities from these challenges, saying, “These market and economic conditions provide opportunities for active fund managers to differentiate between companies and to capitalise on value as it emerges.”

Magellan share price snapshot

After a rough 2022, the Magellan share price is up 8% so far in 2023. As you can see in the chart below, shares in the ASX 200 fund manager remain down 41% over the past 12 months.

The post Magellan share price shakes off 60% profit slump and marches higher appeared first on The Motley Fool Australia.

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• Earnings preview: Here are the ASX shares reporting on Thursday
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The South32 Ltd (ASX: S32) share price is fighting back after the mining giant posted its first-half earnings this morning.

Stock in the S&P/ASX 200 Index (ASX: XJO) diversified mining and metals company plummeted on open, falling to a low of $4.45 – a 3.7% tumble.

It has since recovered to trade 0.43% in the green at $4.64.

South32 share price suffers early slip alongside profits

Here are the highlights of the half-year report:

• US$3.7 billion of revenue – an 8% fall on that of the prior comparable period (pcp)
• US$685 of profit after tax – down 34% on the pcp
• US$560 million of underlying earnings – a 44% drop
• US$1.36 billion of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) – down 27%
• Basic earnings per share (EPS) slipped 33% to 14.9 US cents
• 4.9 US cent interim dividend declared – down from 8.7 US cents last year

South32’s profits tumbled alongside commodity prices last half, with additional dints from inflation and uncontrollable costs.

Its production increased 12% last half, helped by investment in copper and low-carbon aluminium, while coal was the biggest earnings contributor.

It ended the period with US$1.6 billion of cash and a US$298 million net debt position.

What else did the company announce today?

In good news for those invested in South32 shares, the company has increased its buyback by around US$50 million, leaving it with US$158 million to return to shareholders before September.

The company also revealed changes to its upper management team this morning.

Its current chief financial officer (CFO) Katie Tovich will be appointed chief human resources and commercial officer, while its vice president of finance Sandy Sibenaler will step up to the CFO position.

What did management say?

South32 CEO Graham Kerr commented on the results driving the company’s share price today, saying:

We delivered another period of strong production results, and while commodity prices retreated from record levels, we recorded one of our largest profit results to date with Underlying EBITDA of US$1.36 billion.

Our strong financial result was underpinned by production growth of 12%, our recent portfolio improvements, which increased our exposure to the metals critical to a low-carbon future, and continued focus on cost efficiencies.

The long-term outlook for our business is positive as a result of our portfolio investments and high-quality development options in the metals critical for a low-carbon future.

What’s next?

Looking forward, South32 believes commodity markets have strengthened. That leaves it ready to benefit from the planned production growth and lower operating costs expected across the majority of its operations in the second half.

It expects its production will increase another 6% this half. That’s tipped to be supported by embedded improvement projects and the ramp-up of its Brazil Aluminium smelter.

Meanwhile, its full-year capital expenditure guidance has dropped US$105 million to US$1.14 billion.

South32 share price snapshot

The South32 share price has gained 17% so far this year. It’s also currently 3% higher than it was this time last year.

For comparison, the ASX 200 has risen 6% year to date and around 1% over the last 12 months.

The post South32 share price recovers as earnings tumble 44% appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The National Australia Bank Ltd (ASX: NAB) share price is clawing back some of Wednesday’s decline.

In morning trade, the banking giant’s shares are up 1% to $30.60.

Why is the NAB share price rising?

The NAB share price is rising today thanks to the release of the bank’s first quarter update.

For the three months ended 31 December, the big four bank reported a 15% increase in revenue and an 18.7% jump in cash earnings to $2.15 billion.

This was driven by higher net interest margins (NIM), stronger Markets & Treasury income, and volume growth, partly offset by home lending competition.

In respect to NAB’s NIM, it improved by 12 basis points to 1.79% due to the benefits of the rising interest rate environment.

Broker reaction

Brokers have responded positively to NAB’s update. For example, Goldman Sachs highlights that this update implies that the bank is run-rating 3% ahead of its first half estimates. It commented:

NAB has released its 1Q23 trading update, with unaudited cash earnings from continuing operations of A$2.15 bn, up 18% on the previous period average, run-rating 3% above what is implied by our current 1H23E forecasts. The better than expected performance was driven by stronger revenues (Markets) and lower BDDs, partially offset by higher expenses. PPOP was up 23% on the previous period average, and also 3% ahead of GSe. NAB’s CET1 ratio of 11.3% was running in-line with our implied 1H23E forecasts.

The broker also suspects that the result could ease concerns about its margins following the update from Commonwealth Bank of Australia (ASX: CBA) yesterday. That update appeared to indicate that CBA’s NIM had peaked a year earlier than expected. Goldman doesn’t believe this is the case for NAB. It said:

We see NAB’s 1Q23 operating performance as a positive, particularly given the commentary CBA made at its 1H23 result, which suggested NIMs have peaked. While detailed commentary is not included in today’s update, NAB’s 1Q23 operating trends seem consistent with management commentary at its FY22 result (here), particularly it relates to NIMs. We note we currently forecast NAB’s NIM to rise 15 bp hoh in 1H23E, 4 bp in 2H23E, before beginning a steady path downwards.

Goldman has a buy rating and $35.60 price target on NAB’s shares.

The post NAB share price higher on stronger than expected Q1 update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s fair to say that the Commonwealth Bank of Australia (ASX: CBA) share price had a horrid day yesterday. Wednesday’s session saw CBA shares plunge by a nasty 5.72%.

The ASX 200 bank share closed at $109.25 each on Tuesday. But by the end of yesterday’s session, those same shares were going for $103 on the dot.

Commonwealth Bank is the second-largest share by market capitalisation on the S&P/ASX 200 Index (ASX: XJO). As such, this dramatic fall had a big impact on the entire market.

It’s not really a mystery why CBA shares had such a hard day. The bank began Wednesday by releasing its latest half-year results for FY2023, covering the six months to 31 December 2022.

As we covered at the time, this saw CBA announce a 12% increase in operating income to $13.59 billion, as well as a 9% rise in cash earnings to $5.15 billion.

Investors were also treated to some rewards, including a 20% hike to CBA’s interim dividend to $2.10 per share, as well as a $1 billion extension of Commonwealth Bank’s share buyback program.

That all sounds great, so why did investors punish the CBA share price so convincingly?

Top ASX 200 bank share disappoints investors

Well, as my Fool colleague James went into yesterday, it could be “due to concerns that the bank’s net interest margin has already peaked. If this is the case, it has peaked well ahead of expectations”.

The net interest margin (NIM) is the difference between how much CBA is making in loan interest, and how much interest it is paying to depositors.

So no doubt CommBank’s veritable army of retail investors would be disappointed with what happened yesterday. But perhaps some value investors out there might see this as a buying opportunity for the ASX 200’s largest bank share.

So could CBA shares be in the buy zone after this large and sudden fall in value?

Is the CBA share price a buy after yesterday’s 5% fall?

Well, unfortunately, it’s hard to find an ASX broker who is exceedingly bullish on CBA shares right now.

Yesterday, we covered how broker Goldman Sachs rang the warning bell on CBA’s falling net interest margins. Here’s some of what Goldman had to say there:

Disclosure by CBA suggests that its monthly NIM peaked around the middle of 1H23, which likely implies our 1H24 peak half-year NIM forecast is optimistic.

Goldman already had a sell rating on CBA shares, with a 12-month share price target of just $92.56. So it’s highly doubtful this broker is going to start telling investors to buy with the CBA share price still above $100:

Last week, we also covered the views of Argonaut’s adviser and broker Harrison Massey. Massey was quoted as stating that “the bank offers attractive defensive qualities. However, at recent levels, it may be prudent to trim exposure and pocket a profit”.

So it seems that CBA shares have friends few and far between right now. No doubt ASX investors will be hoping the bank can turn things around. Perhaps even get back to the $110-plus share prices we had been seeing for most of February thus far. But we’ll have to wait and see what happens.

At the last CBA share price, this ASX 200 bank stock had a market capitalisation of $173.9 billion, with a dividend yield of 3.74%.

The post Is the CBA share price a buy following Wednesday’s 5% fall? appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Thursday
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• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price rose after reporting its FY23 half-year result yesterday. There were a number of elements that I liked about the result, though the share price is a separate question.

As a quick reminder, Wesfarmers is the business that owns Kmart, Bunnings, Officeworks, Priceline, Target, and other businesses.

What I liked about the result

Certainly, there were a number of pleasing aspects to the result.

First, overall growth was solid. Total revenue, excluding Wesfarmers Health, saw 11.4% growth. This helped profit growth. Earnings before interest and tax (EBIT) increased 13.4% to $2.16 billion, net profit after tax (NPAT) grew 14.1% to $1.38 billion, and operating cash flow jumped 26.7% to $1.97 billion.

Another positive factor was that cash returns to shareholders were bumped up – the interim dividend went up by 10% to 88 cents per share.

I was expecting Kmart and Target to reveal a good turnaround because the first half of FY22 saw COVID-19 lockdowns, hurting bricks and mortar retailers. With lockdowns no longer happening, Kmart Group managed to grow earnings before tax (EBT) by 114% to $475 million. That was a strong result, considering the uncertain economic times, though Kmart could excel when customers are looking for value.

The performance of other divisions was particularly impressive, in my opinion. Officeworks saw EBT grow by 3.7% to $85 million.

While Bunnings only grew EBT by 1.5% to $1.28 billion, the fact that it achieved any growth is impressive in my opinion. Seeing as Bunnings makes most of the ASX 200 share’s profit, it can have the biggest influence on the Wesfarmers share price. Management noted strong growth from commercial customers and resilient customer demand. Bunnings focused on “delivering great value for customers”.

Bunnings expanded Tool Kit Depot into the east coast of Australia, while a new frame and truss plant was opened in Victoria during the half.

Wesfarmers’ chemicals, energy, and fertilisers division (WesCEF) experienced an earnings jump of 48.6% to $324 million. It’s benefiting from favourable global commodity prices for LPG, ammonia, and related products, together with increased ammonia production and strong plant operating performances.

Mt Holland, Wesfarmers’ lithium project, continues to see progress. It will be very helpful for earnings once it’s completed.

Is the Wesfarmers share price a buy?

Retail trading results at the start of the second half of FY23 showed growth for the ASX 200 share, particularly in areas affected by the Omicron variant.

I think the business has proven over the last three years that it can perform in almost any economic conditions. It sells products that are nearly always in demand, at a price that is winning customers.

The fact that Wesfarmers is continuing to expand its business is very promising for the long term in my opinion. The healthcare sector has long-term tailwinds, such as ageing demographics, so I think it makes sense for Wesfarmers to grow in this area, starting with Priceline and Clear Skincare Clinics.

I think it’s one of the best ASX 200 shares around – it has high-quality businesses, growth potential with each division, and a focus on returns to shareholders. I believe that Wesfarmers shares are a long-term buy. Indeed, Macquarie just increased its target price on Wesfarmers to $56.70, according to reporting by The Australian. That suggests further rises are possible.

The post Are Wesfarmers shares a buy following the ASX 200 giant’s latest earnings result? appeared first on The Motley Fool Australia.

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• Will ASX 200 shares crash in 2023?
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Insurance Australia Group Ltd (ASX: IAG) share price is in the woes this morning. The stock is falling 1.9% to trade at $4.74.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is in the green, lifting 0.14%.

But there’s a simple explanation behind the IAG share price’s slump. The insurance giant is trading ex-dividend.

IAG stock slumps 2% on ex-dividend date

I’ve got bad news for anyone still on the fence about buying IAG stocks for the company’s upcoming dividend.

As of yesterday’s close, new investors buying into the stock won’t receive the payout. It will instead go to the stock’s former owner.

And the IAG share price is falling in turn. That’s because the market can no longer factor the 6 cents per share offering into the value of its stock.

IAG announced the 30% franked dividend on Monday alongside its earnings for the first half of financial year 2023.

It posted a $468 million net profit after tax (NPAT) – a 171% year-on-year improvement, while its gross written premium lifted 7.5% to around $7.1 billion.

Meanwhile, the 6 cents per share dividend was flat on its previous interim offering. Though, this time it’s fully franked at 30%.

Considering its newly declared dividend alongside its previous full-year offering, IAG shares boast a 2.3% dividend yield at their current price.

But eager investors might want to hedge their excitement for now.

The payout won’t be paid out until 23 March – meaning they still have six weeks to wait before seeing the distribution.

IAG share price snapshot

The IAG share price has been underperforming in recent times.

The stock has gained 2% this year while the ASX 200 has leapt 6%.

Looking further back, IAG shares have risen around 1% since this time last year – in line with the index’s performance.

The post Why is the IAG share price sliding lower on Thursday? appeared first on The Motley Fool Australia.

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• 3 ASX 200 shares trading ex-dividend before the end of this week
• Here are the top 10 ASX 200 shares today
• Why Audinate, Endeavour, IAG, and Vitura Health shares are charging higher
• IAG share price marching higher on 25% profit boost
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Origin Energy Ltd (ASX: ORG) share price is in the red on Thursday after the company released its earnings for the first half of financial year 2023.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy producer and provider are currently 0.84% lower at $7.05 per share.

The company also reiterated that, despite due diligence dragging on longer than expected, a takeover bid posed by a consortium still stands. The consortium has now substantially completed due diligence.

Origin Energy share price gains as dividend grows 32%

Here are the highlights of the first-half report:

• $399 million statutory profit – an improvement on the prior comparable period’s (pcp) $131 million loss
• $44 million underlying profit – an 83% fall on that of the pcp
• $1.06 billion of underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) – a 4% decrease
• Free cash flow came in at a $429 million loss – down from a $112 million loss
• 16.5 cents per share fully franked interim dividend declared – a 32% increase on the pcp’s unfranked offering

The company posted a mixed result this morning as its gas business outperformed while its energy markets business weighed.

The former posted $954 million of underlying EBITDA – a 10% improvement, while that of the latter fell 45% to $148 million.

Though, production at the gas business slipped 5% amid wet weather and unplanned outages, with a recovery underway.

Meanwhile, earnings at the energy markets business were hit by the under-recovery of wholesale energy costs in customer tariffs and higher fuel costs. Its retail leg continued to grow, adding 30,000 customer accounts to reach 4.5 million last half.

Australia Pacific LNG (APLNG) delivered $783 million to the ASX 200 energy giant.

What else happened last half?

Of course, the major news driving the Origin share price last half was the $18.4 billion takeover offer from a consortium including Brookfield Asset Management and MidOcean Energy.

The group put forward a $9 per share bid in November and was granted due diligence. However, its exclusivity period was twice extended before expiring, likely sparking worry among investors.

The company also sold its interest in the Beetaloo Basin last half.

What did management say?

Origin CEO Frank Calabria commented on the results driving the company’s share price today, saying:

Origin has an advantaged portfolio, is positioned for growth, and provides the ideal platform for investment into the energy transition, enabling the company to capture value and continue delivering good outcomes for our millions of customers, our communities, and shareholders.

What’s next?

The company expected to post higher free cash flow in the second half, helped by higher energy markets earnings and strong distributions from APLNG.

It recently revealed its energy markets business is on track to post between $600 million and $730 million of underlying EBITDA this financial year. It now expects that to come in at the higher end of guidance and to grow further in financial year 2024.

The transformation of its retail business is also progressing, with customer migrations to the Kraken platform to complete this quarter. Origin is targeting $200 million to $250 million of cash cost savings on a financial year 2028 baseline by 2024.

It’s also expecting to exit its interests in the Canning Basin in the current half.

Origin share price snapshot

The Origin Energy share price is currently 5% lower than it started 2023. Though, it’s still 18% higher than it was this time last year.

For comparison, the ASX 200 has risen 6% year to date and 1% over the last 12 months.

The post Origin Energy share price drops on underlying profit tumbling 83% appeared first on The Motley Fool Australia.

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More reading

• Why Liontown, Megaport, Origin, and Tyro shares are pushing higher today
• Origin share price higher on earnings guidance upgrade
• Why Baby Bunting, Origin, Rio Tinto, and South32 shares are dropping today
• Buy ‘underappreciated’ Origin Energy shares for 20% upside: Morgan Stanley

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Group Ltd (ASX: TLS) share price is rising on Thursday.

In morning trade, the telco giant’s shares are up 0.5% to $4.16.

Why is the Telstra share price rising?

Investors have been bidding the Telstra share price following the release of the company’s half year results.

For the six months ended 31 December, Telstra reported a 6.4% increase in total income to $11.6 billion and an 11.4% jump in earnings before interest, tax, depreciation and amortisation (EBITDA) to $3.9 billion.

This was underpinned by momentum from its mobiles business and support from the acquisition of Digicel Pacific.

In light of its strong form, the Telstra board elected to increase its fully franked interim dividend by 6.3% to 8.5 cents per share.

The company also reaffirmed its FY 2023 guidance. Though, it did suggest its total income would be at low end of its $23 billion to $25 billion guidance range due to mobile hardware and fixed product revenues being lower than expected.

Broker reaction

Goldman Sachs has responded positively to the Telstra result, noting that its revenue and earnings were ahead of its estimates. It commented:

Telstra has reported 1H23 Revenue/EBITDA/NPAT of A$11.6bn/A$3.9bn/A$935mn, which was +2%/+1%/+4% vs. our estimates. Telstra’s gearing increased to 1.9X at 1H23 (1.8X at FY22, comfort band 1.5-2X), given a working capital build drove softer FCF (-39% vs. PcP). An interim dividend of 8.5¢ps was declared, inline with our estimate of 8.5¢ps, (representing 105% of EPS Excl. one-offs and 139% of FCF, noting typical 2H FCF skew).

Looking ahead, the broker believes that Telstra is tracking towards the upper end of its earnings guidance for FY 2023.

Despite Telstra re-iterating FY23/T25 guidance, we believe that based on annualising 1H23 underlying EBITDA, and the stronger (sequentially mobile and NAS businesses, the full year result is tracking above the mid-point of its $7.8-8.0bn range.

Goldman currently has a buy rating and $4.60 price target on Telstra’s shares.

The post Telstra share price higher on half-year revenue and earnings beat appeared first on The Motley Fool Australia.

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More reading

• Telstra share price on watch amid strong half-year profit growth
• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• If I invest $2,000 in Telstra shares now, what could my return be in 2023?
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Newcrest Mining Ltd (ASX: NCM) share price is on watch this morning.

This comes after the S&P/ASX 200 Index (ASX: XJO) gold miner rejected the takeover offer from US gold giant Newmont and released its half-year results for the six months ending 31 December.

First, the takeover offer…

Newcrest share price in focus as takeover offer rebuffed

On 6 February, the Newcrest share price leapt 14% following news of Newmont’s conditional, non-binding, and indicative proposal to acquire 100% of Newcrest by way of a scheme of arrangement.

Newmont offered 0.380 Newmont shares for each Newcrest share held.

At that time, the offer represented a 22% upside to the Newcrest share price.

Today the Newcrest board announced it had unanimously rejected the offer, saying it doesn’t “represent sufficient value” for Newcrest shareholders.

The board said it considers “Newcrest to be uniquely positioned with a portfolio of long-life Tier 1 gold and copper assets, with increasing copper exposure and a high-quality development pipeline”.

Management said they’re happy to consider an improved proposal from Newmont but stressed there’s no certainty one will be forthcoming.

What did the ASX 200 gold miner report for the half year

The Newcrest share prise is also on watch today after the ASX 200 gold miner reported its half-year results (1H FY23).

Highlights include:

• Gold production of 1.04 million ounces, up 25% from 1H FY22
• Copper production of 67,023 tonnes, up 32%
• Revenue of $2.12 billion, up 24%
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $919 million, up 24%
• Statutory and underlying profit of $293 million, down 2% from 1H FY22
• All-In Sustaining Cost (AISC) of $1,089 per ounce, delivering an AISC margin of $585/oz
• Interim dividend of US 15 cents per share (cps) and special dividend of US 20 cps, both fully franked

What did management say

Commenting on the results that have the Newcrest share price on watch this morning, CEO Sherry Duhe said:

We made significant progress on the execution of our growth strategy during the first half. We were very pleased to progress the Cadia PC1-2 and Lihir Phase 14A studies to execution, as well as completing the two-stage plant expansion at Cadia and further extending the mine life at Telfer.

Our global gold and copper portfolio is well placed for the future, with our transformation program delivering excellent progress at Brucejack, activities underway to maximise the value of our Red Chris and Havieron projects, and ongoing exploration success highlighting the potential for significant resource growth across our key target areas.

The post Newcrest share price on watch amid results and takeover rejection appeared first on The Motley Fool Australia.

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More reading

• How do I cash in my Newcrest shares if US giant Newmont takes over?
• 5 things to watch on the ASX 200 on Friday
• Takeover bid undervalues Newcrest shares: Citi analysts
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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