Why Ansell, ARB Corp, HUB24, Sims, and Sonic Healthcare shares moved so much today

Earnings season is well and truly in full swing this week – the biggest week in terms of the number of companies reporting. We’ve already seen some big beats and misses, as well as accompanying share price moves. There were a few results in particular today which attracted significant market responses, both positive and negative.

Here’s a quick overview of today’s key results from the biggest movers post announcements: Ansell (ASX: ANN), ARB Corporation (ASX: ARB), HUB24 (ASX: HUB), Sims Group (ASX: SGM), and Sonic Healthcare (ASX: SHL).

The goal here is to help you understand the nature of the result, whether it was better or worse than expected, and therefore, help assist you in rationalising the market’s response.

Ansell (ANN)

Headline: Sales $784.9m (-7.6%), EBIT $78.2m (-6.4%), EBIT Margin 10.0%

Better/Worse than expected?: WORSE (3% below consensus for Sales & EBIT, EBIT Margin 0.5% below consensus)

Key Highlights: 

• Sales growth and significant margin improvement achieved in Industrial

• Accelerated Productivity Investment Program on track, annualised FY26 pre-tax savings target increased from $45m to $50m, but total expected cash costs increased from $70-85m to $85-90m

• Delivered targeted working capital reduction, resulting in strong operating cash flow

Outlook statements: Company narrowed FY24 EPS guidance to US$0.94-US$1.10, from US$0.92-US$1.12 vs consensus US$0.99

Market response so far:

• Stock price: -3%

• Citi: “We expect the stock likely to trade lower given the earnings miss and the larger than usual 2H skew” Retains “NEUTRAL” rating and $26 price target

Chart:

Ansell technicals suggest the supply-side is back in control

• ST/LT Trends: ⬇️/⬇️

• Price action: 📉

• Candles: ⬛

• Commentary: Technicals suggest the supply-side is back in control

ARB Corporation (ARB)

Headline: Sales $341.5m (+0.2%), EBIT $72.5m (+12.6%), EBIT Margin 20.9% (+1.65%)

Better/Worse than expected?: BETTER (Sales around 2% below consensus but EBIT around 2% above consensus and Margins around 1% above consensus)

Key Highlights: 

• Sales were significantly hindered by industrial disputes across Australian ports resulting in inbound and outbound disruptions

• Growth achieved in the Australian Aftermarket and OEM

• Export markets continued to be a challenge in 1H FY2024

• Vehicle availability has improved around the world, notably in Australia and the UK

• Profit growth exceeded revenue growth driven by improved gross margins resulting from reductions in freight and the impact of sales price increases.

Outlook statements: January demonstrated strong sales, helped by resolution of Australian port disruptions. Strong order book, but wholesale customers are starting to manage inventory levels.

Market response so far:

• Stock price: +11%

• Citi: “We think the stock should be supported by the better than expected result…importantly the outlook seems incrementally better” Retains “BUY” rating and $35.18 price target

Chart:

ARB Corp technicals indicate substantial demand-side control

• ST/LT Trends: ⬆️ / ⬆️

• Price action: 📈

• Candles: ⬜

• Commentary: Technicals indicate substantial demand-side control

HUB24 (HUB)

Headline: Sales $156.7m (+14%), EBIT $55.0m (+10%), EBIT Margin 35.5% (-1.17%)

Better/Worse than expected?: BETTER (in-line with consensus for Sales, EBIT around 2% above consensus, EBIT Margin around 0.5% above consensus)

Key Highlights:

• Strong FUA growth and record 1HFY24 net inflows of $7.2 billion

• 1st for overall platform quarterly and annual net inflows

• Awarded Best Platform Overall for the 2nd year running

• Equity Trustees planned migration, affecting $4 billion in AUM on track

• Continued to gain market share, which increased to 6.7% (up from 5.7%)

• Number of advisers increased to 4,297 (+16%)

Outlook statements: Funds under management to 15 February are up 3% beating ASX200 performance only up 0.2%. Company reiterated FY25 funds under management guidance of $92 billion-$100 billion.

Market response so far:

• Stock price: +7%

• Citi: “We see potential for the share price to outperform today” Retains “BUY” rating and $42.20 price target

Chart:

HUB24 technicals indicate substantial demand-side control

• ST/LT Trends: ⬆️ / ⬆️

• Price action: 📈

• Candles: ⬜

• Commentary: Technicals indicate substantial demand-side control

Sims (SGM)

Headline: Sales $4.1b (+7.4%), EBIT $13.4m (-85.6%), EBIT Margin 0.3% (-2.4%)

Better/Worse than expected?: WORSE (Sales about 4% below consensus, EBIT about 4% below consensus, EBIT Margin about 0.5% above consensus)

Key Highlights:

• Disappointing EBIT performance driven by lower Metal trading margins and inflationary pressures

• Challenging market conditions prevailed across all Metal segments

• Sims Lifecycle Services performed well, delivering solid EBIT, repurposed unit growth, and market share

Outlook statements: Second half underlying EBIT expected to improve versus first half, FY24 Sustaining and environmental capital expenditure is expected to remain within previous guidance of A$180 million.

Market response so far: Stock price -9.3%

Chart:

Sims Group technicals suggest the supply-side is back in control

• ST/LT Trends: ⬇️/⬇️

• Price action: 📉

• Candles: ⬛

• Commentary: Technicals suggest the supply-side is back in control

Sonic Healthcare (SHL)

Headline: Sales $4.3b (+5%), EBITDA $737m (-20%), EBITDA Margin 17.1% (-5.4%)

Better/Worse than expected?: WORSE (Sales about 1.7% above consensus BUT EBITDA about 15.5% below consensus)

Key Highlights:

• First half FY24 EBITDA was in line with the guidance provided at the company’s 2023 AGM

• Organic revenue growth for Radiology division was strong at 11%

• Organic base business growth was particularly strong in Australian  (+9%), German  (+8%),  and  UK  (+13%)  laboratory businesses

• Revenue and earnings comparisons with H1 FY23 were impacted materially by the 90% reduction in COVID-related revenues ($39 million versus $379 million)

Outlook statements: On track to achieve full-year EBITDA guidance provided in August 2023, but now more likely towards the lower end of the guidance range (A$1.7 billion to $1.8 billion)

Market response so far: Stock price -7.9%

Chart:

Sonic Healthcare technicals suggest the supply-side is back in control

• ST/LT Trends: ⬇️/⬇️

• Price action: 📉

• Candles: ⬛

• Commentary: Technicals suggest the supply-side is back in control

Carl’s Technical Analysis Methodology Key

Trends

ST Trend ribbon: 21 & 34 EMAs || LT Trend ribbon: 144 & 233 EMAs

⬆️ = Uptrend, the ribbon is rising indicating a higher probability the market is in a general state of excess demand

⬇️= Downtrend, the ribbon is declining indicating a higher probability the market is in a general state of excess supply

➡️ = No trend, the ribbon is flattening indicating a higher probability the market is in equilibrium

Price Action

📈 = Rising peaks and rising troughs indicating buy-the-dip activity and supply removal (i.e., indicating a higher probability market is in a general state of excess demand)

📉 = Falling peaks and falling troughs indicating sell the rally activity and demand removal (i.e., indicating a higher probability market is in a general state of excess supply)

⬅️➡️ = Neither of the above scenarios, market price action is indecisive

Candles

⬜ = Predominantly demand-side candles in the recent past, i.e., white bodies and or downward-pointing shadows (i.e., indicating a higher probability market is in a general state of excess demand)

⬛ = Predominantly supply-side candles in the recent past, i.e., black bodies and or upward-pointing shadows (i.e., indicating a higher probability market is in a general state of excess supply)

⬜⬛ = Mixed, i.e., indicating no discernible trend towards demand-side or supply-side candles in the recent past