February reporting season preview

The February results season marks another critical juncture for investors given the recent step-up in volatility. Lower global growth, Euro zone debt concerns and turmoil in the oil market all pose material risks to returns. Investors therefore need to take a highly selective, bottom-up approach in 2015, with the February result period offering a critical health check of Australian corporates.

Consensus estimates of corporate earnings have steadily fallen through the first half, reducing the likelihood of downside surprises. The market expects a mere 2.2% growth in full-year earnings for the top 200 stocks in FY15 so expectations are clearly low.

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