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It’s usually one of the biggest setpieces of the ASX earnings season, and this February, it’s likely that Commonwealth Bank of Australia (ASX: CBA)’s latest report won’t fail to live up to that reputation. And, as usual, the next CBA dividend is set to be centre stage.

CBA is scheduled to deliver its next half-yearly earnings report this Wednesday, 14 February. That’s when we’ll get the measure of how the six months to 31 December 2023 have treated the largest ASX 200 bank share.

It’s also when we’ll know just how big CBA’s 2024 interim dividend is going to be. No doubt CBA’s army of shareholders will be hoping for a very loving Valentine’s gift from the bank.

Like most ASX blue-chip shares, CBA tends to pay out a dividend every six months.

Last year, investors were delighted when the bank dramatically upped its dividends over the previous year’s payouts. The March interim dividend of $2.10 per share (fully franked of course) was a big jump over 2022’s equivalent payout worth $1.75 per share. Likewise, CBA’s September final dividend of $2.40 was another big leap higher compared to the prior payment of $2.10.

2023 was also a record year for CBA. The bank finally exceeded its previous record set in pre-COVID 2019 by forking out an annual $4.50 in dividends per share.

So could 2024 set an even fresher record? Will the cash flows from this dividend fountain of a stock get even stronger?

CBA dividend in focus this Valentine’s Day

Sadly for investors, one ASX expert reckons it’s not likely. As reported in The Sydney Morning Herald (SMH) this week, Brendan Sproules, banking analyst at Citi Group, is very wary of all of the bank stocks right now. And CBA in particular.

Sproules is expecting a mixed showing from the ASX bank on Wednesday. He told the SMH that he was anticipating CBA profits would beat consensus and “crack the $5 billion mark” thanks to lower bad debts.

However, he is going the other way when it comes to the bank’s dividend. Sproules is pencilling in an interim dividend of $2.10 per share for 2024. That is 3% below the prevailing consensus amongst analysts and would mirror 2023’s interim payment. Here’s what he said on the matter:

We think the board will be wary of lifting the dividend when core earnings are falling [and as the bank heads] into a deteriorating credit quality environment.

For what it’s worth, the report also quoted Andrew Triggs of JPMorgan. Triggs warned investors to watch out for falling margins at CBA, and also described the current CBA share price as “impossible to justify” at its current valuation.

Probably not the Valentine CBA investors are hoping for this Wednesday. But let’s see what the bank comes out with.

The post Why the CBA dividend fountain will be in focus this week appeared first on The Motley Fool Australia.

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More reading

• 3 top ASX bank shares hit 52-week highs today: Is there still value to be found?
• 2 ASX 200 shares I’d buy for my child and hold ’til the 2030s
• I’ve made 40% in 3 months on this ASX 200 stock, I still think it’s a buy
• 5 things to watch on the ASX 200 on Monday
• Here’s how the ASX 200 market sectors stacked up this week

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended JPMorgan Chase. 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 Aurizon Holdings Ltd (ASX: AZJ) share price is pushing higher on Monday afternoon.

At the time of writing, the rail freight operator’s shares are 3% to $3.87.

Investors have been buying Aurizon’s shares following the release of its half-year results.

Aurizon share price higher on results release

Here’s a summary of how the company performed during the six months ended 31 December:

• Revenue up 16% to $1,972 million
• Underlying EBITDA up 26% to $847 million
• Underlying net profit after tax up 40% to $237 million
• Underlying earnings per share up 40% to 12.9 cents
• Interim dividend per share up 39% to 9.7 cents

What happened during the half?

During the first half, Aurizon was on form and delivered a 16% increase in revenue to $1,972 million and a 26% jump in underlying EBITDA to $847 million.

The latter was driven by growth across all businesses.

Coal EBITDA increased 23% to $283 million, with higher revenue resulting from increased volumes (up 4%) and improved revenue yield due to the mix of volume between corridors and customers, in addition to CPI indexation.

Aurizon’s Bulk EBITDA increased 12% to $112 million. This was driven by volume recovery and new contracts, offset by customer specific production issues and lower grain volumes

The star of the show was its Network business. Network EBITDA increased 34% to $486 million thanks to a recovery in volumes (up 3%) and an uplift in the Maximum Allowable Revenue.

On the bottom line, underlying net profit after tax was up 40% to $237 million, which allowed the Aurizon board to lift its interim dividend by 39% to 9.7 cents per share.

How does this compare to expectations?

This result was slightly ahead of expectations, which explains why the Aurizon share price is lifting today.

Here’s what Goldman Sachs is saying about the result:

Group Revenue of A$1,972m was +1% vs. GSe and +3% vs. Visible Alpha Consensus Data. Group EBITDA of A$847m was +3% vs. GSe and consensus. Assuming a 50% 1H/2H skew, this run rate is ~3.6% above the FY24 guidance midpoint (range A$1,590-1,680m).

Management commentary

Aurizon managing director and CEO, Andrew Harding, was pleased with the half. He said:

This was a strong result for the half, underpinned by solid performance in the Network and Coal businesses and with continued revenue and volume growth in Bulk and Containerised Freight. Further investments were made during 1HFY2024 in new rollingstock, port and terminal equipment across our national footprint and will continue in 2HFY2024 aligned with equipment delivery. This will ensure Aurizon is well-positioned for current growth opportunities, as well as emerging markets.

Outlook

Management has maintained its guidance for FY 2024. It expects group underlying EBITDA in a range of $1,590 million to $1,680 million.

It is also guiding to sustaining capex of $600 million to $660 million (including ~$40 million of transformational project capital) and growth capex of $250 million to $300 million.

The Aurizon share price is now up 12% over the last 12 months.

The post Aurizon share price charges higher on half-year earnings beat appeared first on The Motley Fool Australia.

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More reading

• 3 ASX dividend shares for income investors to buy now
• Here are 3 ASX 200 dividend shares analysts love

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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Aurizon. 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 S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small decline. In afternoon trade, the benchmark index is down 0.2% to 7,630.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

CSL Ltd (ASX: CSL)

The CSL share price is down 5% to $290.02. Investors have been hitting the sell button after the biotechnology company released disappointing results from a major trial. CSL was running the Phase 3 AEGIS-II trial evaluating the efficacy and safety of CSL112 compared to placebo in reducing the risk of major adverse cardiovascular events (MACE) in patients following an acute myocardial infarction (AMI). Unfortunately, the study did not meet its primary efficacy endpoint of MACE reduction at 90 days.

Fletcher Building Ltd (ASX: FBU)

The Fletcher Building share price was down 6% to $3.70 before being paused from trade. There has been speculation that the building products company could be planning an equity raise. Fletcher Building will reveal all once its shares return to trade.

Skycity Entertainment Group Ltd (ASX: SKC)

The Skycity share price is down 2.5% to $1.92. This morning, it was revealed that the Department of Internal Affairs intends to commence civil proceedings against the company for non-compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act.

Wildcat Resources Ltd (ASX: WC8)

The Wildcat share price is down 12% to 47. 5 cents. This is despite there being no news out of the lithium explorer on Monday. Though, it worth noting that a number of ASX lithium shares are falling today. And with Wildcat’s shares rocketing higher last week, they seems to be falling more than most during today’s session.

The post Why CSL, Fletcher Building, Skycity, and Wildcat shares are falling today appeared first on The Motley Fool Australia.

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More reading

• CSL share price sinks 6% on major trial failure
• 3 things ASX investors should watch this week
• Own CSL shares? What to expect from its half-year results
• Here’s how the ASX 200 market sectors stacked up this week
• Morgans says these ASX 50 shares are strong buys

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. 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 been an interesting day on the S&P/ASX 200 Index (ASX: XJO) so far this Monday. At the present time, the ASX 200 has slipped by 0.15%, leaving the index at just above 7,630 points. But, unusually, we are still seeing some healthy rises from the big four ASX 200 bank shares today.

Because the banks form such a large chunk of the overall ASX 200 Index, it’s common to see their collective movements dictate what the broader market is doing. But not so today.

Right now, all four of the major banks are enjoying decent share price rises.

Commonwealth Bank of Australia (ASX: CBA) shares are presently up 0.36% to $116.66.

Westpac Banking Corp (ASX: WBC) stock has risen 0.7% to $24.54.

National Australia Bank Ltd (ASX: NAB) shares have gained 1.25% to $32.78.

And the ANZ Group Holdings Ltd (ASX: ANZ) share price has lifted 1.37% to $28.06.

But it gets even better.

ASX 200 banks see a flurry of new 52-week highs

Three of those big four banks have also hit new 52-week highs today.

ANZ touched a new high watermark of $28.06 a share around midday.

NAB stock hit $32.80 around the same time.

As did Westpac, for its own fresh high of $24.56.

CBA is the odd one out today. Saying that, it was only last month that we saw the ASX 200’s largest bank clock a new all-time, record high of $118.24.

The ASX 200 banks are some of the most popular shares on our stock market, thanks in no small part to the generous (and usually fully franked) dividends these stocks usually fork out every year.

So should investors still be considering investing in these ASX bank shares when they’re at these fresh highs?

Are the bank shares still buys at new 52-week highs?

Well, I think it’s rather subjective, with no right answer. Personally, I’m not too tempted by any of the banks right now.

CBA shares look expensive, as they always do.

My pick of the rest of them is NAB. I already own NAB shares, but I’m not even thinking about picking up any more at these kinds of prices.

As we discussed earlier this month, the recent (and significant) gains in the NAB share price have resulted in the dividend yield you can get for NAB shares dropping more than 20% over the past eight months. Today’s fresh highs for the bank would have ensured an even larger drop.

Back in June last year, you could snag a trailing dividend yield of 6.65% when buying NAB shares. But today, that yield has fallen to just 5.09%. In CBA’s case, we’re looking at a very un-banklike yield of just 3.86%. In the latter’s case, a significantly higher yield is available from a CBA term deposit right now.

While I’m not normally a proponent of timing the market when buying your shares, I do think that an investment in an ASX bank right now isn’t the most compelling value proposition.

If you’re a dividend investor who lives off of your portfolio income, then perhaps an investment in ANZ shares is still a decent idea. ANZ is currently leading the banks in terms of yield, with its 6.23% offering today. Westpac is also looking relatively attractive, with its yield of 5.78%.

Further, ANZ has today just given investors a well-received trading update. In contrast, we’re still waiting for some 2024 data from the other big four banks. I don’t normally like buying a share in the run-up to earning season, given there is usually a fair bit of market speculation going on.

But for anyone else, there are probably better places to look in my view.

The post 3 top ASX bank shares hit 52-week highs today: Is there still value to be found? appeared first on The Motley Fool Australia.

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More reading

• ANZ share price hits 52-week high following Q1 update
• The pros and cons of buying ANZ shares right now
• 3 ASX 200 dividend shares to buy with great yields
• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• ASX dividend shares: What’s better, growth or consistency?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small decline. At the time of writing, the benchmark index is down 0.2% to 7,629.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Audinate Group Ltd (ASX: AD8)

The Audinate share price is up 20% to $19.20. This morning, this media networking solutions provider released its half year results and reported record revenue and EBITDA. Revenue was up 47.7% to US$30.4 million (A$46.6 million) and EBITDA jumped 137% to A$10.1 million. The company’s key Chips, Cards and Modules (CCM) business reported a 45.6% increase in revenue to US$22.7 million.

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is up 4.5% to $1.73. Investors have been buying the energy producer’s shares after it posted a 16% increase in revenue to $941 million for the first half. And while its underlying EBITDA fell 1% to $488 million, this appears to have still been better than expected.

Calix Ltd (ASX: CXL)

The Calix share price is up 6.5% to $2.26. This morning, this environmental technology company announced the completion of a Front-End Engineering and Design (FFED) study for a 30,000 tonne per annum Zero Emissions Steel Technology (ZESTY) Hydrogen Direct Reduced Iron (H-DRI) demonstration plant. The study was supported with funding from the Australian Renewable Energy Agency.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price is up almost 7% to $60.41. This follows the release of the retailer’s half year results this morning. JB Hi-Fi’s total sales were down 2.3% to $5.16 billion and its earnings before interest and tax (EBIT) were down 20% to $386.7 million. However, the market was expecting EBIT of $358.2 million, which means the company smashed expectations.

The post Why Audinate, Beach Energy, Calix, and JB Hi-Fi shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the reduced JB Hi-Fi dividend
• Guess which ASX 300 stock is rocketing 17% after record half
• JB Hi-Fi share price jumps 5% after smashing first-half earnings estimates
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday

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 positions in and has recommended Audinate Group. The Motley Fool Australia has positions in and has recommended Audinate Group. The Motley Fool Australia has recommended Jb Hi-Fi. 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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There was a story in today’s Australian newspaper that highlights the seismic shift happening on global and local stock markets right now.

The headline, a little dramatic in the way of these things, was nevertheless still illustrative: ‘Bloodbath for managed funds as ETFs continue to boom’.

The article begins:

“Australian managed funds haemorrhaged a record net $31bn in 2023 and the wound is likely to deepen as the $177bn exchange-traded fund industry is poised to triple in size this decade, continuing to lure investor cash.”

The shifts, in percentage terms, aren’t as shocking as the language might suggest – apparently outflows from managed funds of around 4%, and growth in ETFs clocks in at 3.4%.

Still, that’s a sizeable difference which, if it continues, will change the shape of money management.

Now, as an unabashed fan of ETFs (despite my job as a stock picker), you’d assume I think that’s a great thing.

And… I do.

But with a very large asterisk.

It is the way of things that those with the incentive and preparedness to take advantage of circumstances will do so. Which is precisely what some people have done with ETFs. To our potential detriment. Let me explain.

See, once upon a time, there was no easy way to invest in the whole market with a single trade. And then Jack Bogle came onto the scene.

He set up a company, Vanguard, that would create the world’s first ‘index fund’, which did exactly what it said – invested in a stock market index.

Costs came down (and down, and down). And index funds earned their place as wonderful ways to get the market return (less a tiny fee). It was – and still is – a fantastic option for many investors.

It was still a little clunky, though – you had to send a cheque (later, a direct deposit) to the fund manager, who would invest it for you. Then, when you wanted your money back, he (it was almost always a bloke back then) would send you the money.

Later, another breakthrough: You could invest in these index funds by buying and selling them on a stock market through your broker – just the way you could buy normal shares.

They were funds, bought and sold on an exchange. Or, as we now know them, exchange-traded funds, or ETFs.

So far so good. Over time, the phrase ‘index funds’ was replaced by ETFs.

And ‘index funds are wonderful’ became ‘ETFs are wonderful’.

Which, in hindsight, was our collective mistake (or someone else’s marketing opportunity, depending on who’s telling the story).

Because, soon after, fund managers decided to create other ETFs. Nothing wrong with that, in theory. If a fund is listed on an exchange, it’s an ETF, just like those index funds.

Except that we could no longer accurately say ‘ETFs are wonderful’ in the same way.

The problem? Investors had already internalised that phrase.

So when these new ETFs were released, they carried some of Jack Bogle’s bright halo with them.

The super-low-cost Vanguard ASX 300 ETF and the triple-leveraged Gold ETF were both ETFs.

And ETFs are great… right?

Not any more. At least, not all of them.

So when I read ‘ETFs are gaining popularity’ I, like most people, instinctively think ‘that’s great… people are swapping high(er) cost managed funds for low cost passive index funds’.

But that’s not necessarily the case. All we know from that data is that people are preferring to invest in stuff listed on an exchange, rather than sending money directly to their fund manager.

I want to believe most people are piling into wonderfully vanilla, super-low-cost, index tracking ETFs.

But too many are probably either being sucked in by the ‘ETFs are great’ mantra, or are mistakenly thinking ‘hey, ETFs are diversified, so if I buy a buy-now-pay-later ETF (for example) it’s not risky’.

I have nothing against active investing. It’s what I do. Or against using ETFs as a way to buy a bundle of companies in a single trade.

But I do have a problem with the (either accidental or deliberate) conflating of these two very different products under the one label.

If I was either the corporate regulator, ASIC or the stock market manager, ASX, I’d get the product manufacturers (yes, that’s what they’re called, and yes, that should tell you everything) to use different acronyms: either ETIF (exchange-traded index-fund) or ETMF (exchange-traded managed fund).

Do I think they will? No, unfortunately.

But that’s how I think you and I should think about these products – at least that’d remind us of exactly what we’re getting, when we invest (and the fees that come with each option!).

Because we all should be a little more like Jack Bogle.

Fool on!

The post Not all ETFs are the same… and that’s a problem appeared first on The Motley Fool Australia.

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More reading

• Why Audinate, Beach Energy, Calix, and JB Hi-Fi shares are charging higher
• Leading brokers name 3 ASX shares to buy today
• Everything you need to know about the reduced JB Hi-Fi dividend
• ANZ share price hits 52-week high following Q1 update
• How big cost-cutting is hoisting the Appen share price 10% today

Motley Fool contributor Scott Phillips has positions in Vanguard Australian Shares Index ETF. 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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With so many shares to choose from on the ASX, it can be difficult to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

AGL Energy Limited (ASX: AGL)

According to a note out of UBS, its analysts have retained their buy rating on this energy giant’s shares with a trimmed price target of $11.25. This follows the release of a first half result that was well ahead of the broker’s expectations. UBS sees scope for further earnings outperformance in the coming years if its generation availability can be maintained. The AGL share price is trading at $8.72 on Monday.

News Corp (ASX: NWS)

Another note out of UBS reveals that its analysts have retained their buy rating on this media company’s shares with an improved price target of $50.40. The broker was pleased with the company’s performance during the December quarter and expects more of the same in the future thanks to its digital business. So, with its shares trading on lower than average multiples, it feels that now is a good time to invest. The News Corp share price is fetching $41.81 this afternoon.

Pro Medicus Limited (ASX: PME)

Analysts at Macquarie have initiated coverage on this health imaging technology company’s shares with an outperform rating and $120.00 price target. The broker has been looking at the company’s prospects in the US market. It believes Pro Medicus could grow its market share from 7% today to 15% in 2030 and 25% in FY 2035. This follows customer feedback that highlights that its Visage 7 software is faster and more efficient than the competition, The Pro Medicus share price is trading at $108.89 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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More reading

• Why AGL, Alliance Aviation, Boss Energy, and Silver Lake shares are falling
• After tripling its dividends, is AGL a passive income share not to be missed?
• Here are the top 10 ASX 200 shares today
• Why AGL, Cochlear, Mirvac, and News Corp shares are storming higher
• 3 ASX All Ordinaries shares rocketing over 10% today

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 positions in and has recommended Macquarie Group and Pro Medicus. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Pro Medicus. 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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One of the biggest ASX 200 names that was scheduled to report its latest earnings this Monday is JB Hi-Fi Ltd (ASX: JBH). Well, JB did report its latest earnings covering the six months to 31 December this morning. And it made for some interesting reading, particularly regarding the latest JB Hi-Fi dividend.

As we went through for JB Hi-Fi this morning, it was a positively received report from the electronics and home appliances retailer.

The company reported that its total sales for the period declined by 2.3% to $51.6 billion. Earnings before interest and tax (EBIT) and net profits after tax (NPAT) were both down 20%. That was to $386.7 million and $264.3 million respectively.

However, as my Fool colleague posited this morning, these numbers were still well ahead of expectations. This probably explains why the JB Hi-Fi share price has popped a robust 5.66% so far today to $59.75 a share.

But let’s get back to the JB Hi-Fi dividend.

JB Hi-Fi reveals 20% dividend cut

So this morning, JB announced that its interim dividend for 2023 would come to a fully franked $1.58 per share.

That’s a bit of a step back for investors. Last year, JB’s interim dividend was worth $1.97 per share, so today’s announced payout represents a 20% cut from that same dividend in 2023.

However, it’s still a lot higher than JB’s last final dividend from September 2023. That was worth $1.15 per share (keep in mind, JB does normally pay a larger interim dividend).

The ex-dividend date for this upcoming interim dividend has been set for 22 February later this month. So if you want to see the cash from this latest dividend arrive in your bank account, you’ll need to own JB shares before that date.

8 March will then be payment day for investors.

JB Hi-Fi is not currently running a dividend reinvestment plan (DRP). As such, investors will have no choice but to accept the cash payment.

At the current share price of $59.75 (at the time of writing), JB Hi-Fi shares offer a trailing dividend yield of 5.22%. With today’s announcement, the company now has a forward dividend yield of 4.57%.

The post Everything you need to know about the reduced JB Hi-Fi dividend appeared first on The Motley Fool Australia.

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More reading

• JB Hi-Fi share price jumps 5% after smashing first-half earnings estimates
• 5 things to watch on the ASX 200 on Monday
• History shows 2024 could be a big year for ASX 200 shares. Here are 3 to look at now
• Buying ASX retail shares? You’ll want to see these numbers
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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 recommended Jb Hi-Fi. 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 ANZ Group Holdings Ltd (ASX: ANZ) share price is having a positive start to the week.

In morning trade, the banking giant’s shares are up over 1% to $28.03.

Why is the ANZ share price rising?

Investors have been bidding the ANZ share price higher today in response to the release of the bank’s quarterly update.

While the update provides only limited financial information, it does give the market a good idea of how the bank is performing in FY 2024.

According to the release, first quarter group revenue was in line with the first half FY 2023 quarterly average of $5.26 billion. This reflects broadly flat Non-Markets revenue, assisted by growth in average interest earning assets.

Management also advised that its Institutional Division’s Markets business had a good start to the year with revenues a little better than the first half FY 2023 quarterly average of $575 million.

Costs, lending, and debts

Another positive was commentary around its expenses, which remain under control. Management said:

ANZ has demonstrated a proven ability over many years to manage our expenses well and while facing into ongoing inflationary pressures, we continue to execute on productivity initiatives to partially offset these headwinds.

In respect to lending, its growth remains robust across its Australia Retail and Commercial franchises. Management highlights that its investment in home loan processing capability and capacity and improved broker experience is providing ongoing benefits.

Furthermore, ANZ is continuing to grow its Australian Home Loan book profitably by continuing to offer reliable turnaround times, and competitive but not market leading pricing. Pleasingly, lending growth was substantially self-funded across both Divisions by deposits.

Finally, the bank’s total provision charge was $53 million, comprising a $27 million individual provision charge and a $26 million collective provision charge. Australian Housing 90+ days past due is 70 basis points, which remains well below pre-Covid levels.

What are analysts saying?

Goldman Sachs has run the rule over the update and was pleased with what it saw. This may explain why the ANZ share price is lifting today. It said:

ANZ released its 1Q24 and Pillar 3 disclosure for the quarter ended 31-Dec-23. ANZ’s 1Q24 Group revenue was in line with the 1H23 quarterly average (1H23QA of A$5.26 bn) with Non-Markets revenue broadly in line (1H23QA A$4.69 bn). 1Q24 BDDs (A$53 mn charge) were better than what was implied by prior 1H24 forecasts, and we note that while asset quality has continued to normalize, across various metrics it remains remain better than pre-Covid levels. 1Q24 CET1 ratio of 13.06% was broadly in line with what was implied by our prior forecasts.

The post ANZ share price hits 52-week high following Q1 update appeared first on The Motley Fool Australia.

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More reading

• The pros and cons of buying ANZ shares right now
• 3 ASX 200 dividend shares to buy with great yields
• How to build a bulletproof ASX 200 passive income portfolio with just $10,000
• Which Big Four ASX bank share will pay the biggest dividend this year?
• Buy ANZ and these ASX dividend stocks now

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 positions in and has recommended Goldman Sachs Group. 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 Appen Ltd (ASX: APX) share price has increased 10% after the business revealed plans to cut millions of dollars of costs after a recent major contract loss.

Cost cuts to mitigate the loss of Google

A few weeks ago, Appen told the market that Google, part of Alphabet, was terminating its global inbound services contract with Appen, resulting in the end of all projects with Appen by 19 March 2023. In FY23, Appen’s revenue from Google was $82.8 million at a gross profit margin of 26%.

Appen revealed it’s going to implement measures to achieve $13.5 million of annualised cost savings. The ASX tech share is still focused on returning to profit and managing costs. The costs it’s planning to cut are direct and indirect costs relating to the Google projects.

The company is expecting to complete 80% of the cost initiatives by March 2024, with the rest to be completed by June 2024. An improved bottom line is helpful for Appen shares.

Most of the costs identified to be cut are direct costs, but some indirect costs have also been found which will lead to the eventual closure of the Toronto and Bellvue offices in North America.

Appen is expecting FY25 to be the first full-year benefit of these cost savings to be realised.

However, these savings will come with one-off implementation costs, which are currently estimated at between $1.5 million to $2.5 million. Appen plans to report these as a non-recurring expense and excluded from its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY24.

This adds to Appen’s recent cost-cutting

These cost cuts announced today are on top of the total annualised cost savings of $60 million from initiatives completed over FY23. That cost-cutting allowed Appen to achieve its cash EBITDA profitability objective in December 2023.

Will it be able to achieve FY24 cash EBITDA profitability? Appen said it will “largely depend” on revenue growth from non-global customers, with the timing of that remaining “uncertain”.

Appen share price snapshot

While today is positive for the ASX tech share, Appen shares are still down by around 50% in 2024 to date. It’s down 99% since August 2020.  

It is expecting to report FY23 revenue of $273 million and an underlying EBITDA loss of $20.4 million for FY23.

The post How big cost-cutting is hoisting the Appen share price 10% today appeared first on The Motley Fool Australia.

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More reading

• Appen share price hits all-time low on sudden CEO exit
• Why Alphabet stock was sliding today
• Two giants of the Nasdaq just reported their results. Did they smash expectations?
• Would Warren Buffett buy Appen shares after a 99% drop?
• Why Appen, Baby Bunting, Cooper Energy, and Liontown shares are sinking today

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet and Appen. The Motley Fool Australia has recommended Alphabet. 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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