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DIRECTORS : CHRIS BURRELL ROGER BURRELL ( Non-Exec ) IAN DAVEY ROBERT CHAN ELAINE ANDERSON ALICIA KENDALL MICHAEL BURRELL

ASSOCIATE DIRECTORS : JAMIE ELGAR SASKIA JO DYLAN KATZER BRUCE McLEARY

ASSOCIATES : SHAUN MINAHAN JAMIE KEMP WAYNE MATTHEWS

SENIOR INDEPENDENT DIRECTOR : GREG VICKERY AO email : clientcare @ burrell . com . au internet : www . burrell . com . au

Indications of earnings strength early in February reporting period proved accurate for the earnings season as a whole , with financial results exceeding market expectations more often than not . Evidence of strong underlying corporate fundamentals could be found in almost every sector , with Consumer Staples and Property Trusts delivering the highest rate of surprises on the upside . Stand-out results came from Coles , Woolworths , Charter Hall Group , Goodman and Dexus . Energy disappointed , with higher commodity prices being offset by lower production rates .

Staples delivered the highest rate of upside surprises , with the bulk of the surprise stemmed from Coles and Woolworths , which came in 10 %+ ahead of market forecasts . REITS also had a good season , with the likes of Charter Hall Group , Goodman and Dexus all comfortably exceeding market estimates .

At the other end of the spectrum , Energy fell short of expectations . The weaker than-expected results weren ’ t reflected in post result performance , as the market focused more on the rising trend of commodity prices .

Guidance surprised to the upside during the results season , as opposed to the last few reporting periods which have lacked guidance updates as the pandemic and ongoing lockdowns clouded the outlook . We continue to track company guidance and have seen a robust proportion of updates . Materials , Discretionary and Staples historically provide very little quantitative earnings guidance . The Healthcare stocks remain

MARCH - 2022 cautious , with the sector providing very little guidance again this season .

The proportion of companies seeing consensus EPS upgrades through the season was material . Energy topped the table in positive EPS revisions , whilst IT and Staples , on the other hand , landing deeply in negative territory .

The largest positive revisions within the Energy sector stemmed from Woodside Petroleum and Santos Limited , which saw one-year forward EPS projections raised by 18 % and 10 % respectively . Interestingly , Woodside performed strongly in the wake of its result outperforming the market , while Santos largely tracked the market . Communication Services generated the second highest rate of average EPS revision , however the sector has seen poor stock price performance since reporting . Despite upgrades to Domain Holdings , Seven West Media and REA Group , all three stocks markedly underperformed the market since their results .

Four sectors landed in the red for EPS revisions through the season . The sharpest downgrades were in Tech , which saw earnings decline by 5.5 % on average post result release . The negative revisions in Staples were concentrated in the likes of Blackmores , Inghams Group and Bega Cheese Limited . In contrast , the sector ’ s two heavyweights , Coles and Woolworths , saw upgrades .

The negative trends in Healthcare were surprising . Delving into the detail , Nanosonics and to a lesser

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