CBA and Rio flatten ASX, but earnings delight again

All about the Benjamin’s, market flat but dividends galore, Telstra holds, AMP cuts
 
The ASX200 (ASX: XJO) finished flat on Thursday with Rio Tinto’s (ASX: RIO) massive dividend dragging the stock 6.9% and proving too much for a resilient communications sector (+2.3%) to overcome.
 
It was a broadly positive day with more sectors gaining than losing and reporting season ultimately driving performance, with utilities down 1.7% behind AGL Energy (ASX: AGL) and financials flat as they balance positive and negative news.
 
All eyes were on Telstra (ASX: TLS) with CEO Andy Penn finally appearing to have turned around sentiment towards the company. Shares added 3.7% nearing $4 after management reported a 3.4% increase in profit to $1.9 billion despite an 11.6% fall in revenue.
 
Importantly, the dividend remained at 8 cents as promised with $1.35 billion to be allocated towards an on-market buy back that will benefit shareholders in the longer term.
 
Patient investors are being rewarded as the group’s simplification strategy sees a turnaround in profitability and growth, with a decidedly more digital focus.
 
The company flagged single digit earnings growth for FY22 and continued divestments offer the potential for capital returns.
 
QBE doubles dividend, AGL looks to renewables, AMP ready to recover?
 
The insurance sector remains under immense pressure highlighted by QBE Insurance’s (ASX: QBE) announcement that catastrophe claims had increased 7% to $462 million.
 
Despite this the group reported a 14% increase in revenue to US$9.1 billion and profit of US$441 million, a stunning recovery from last year’s US$712 million loss.
 
Premium increases continued to recovery, jumping 9.7%, but pandemic claims remain an underappreciated issued.
 
Shares jumped 8.1% after reporting an 11 cent per share dividend, up from 4 cents in 2020. Embattled asset manager AMP Ltd (ASX: AMP) climbed 3.2% after announcing a 28% fall in profit to just $146 million.
 
Assets under management continued to fall down $1.7 billion excluding pension payments but total assets increased 6% to $131 billion.
 
New CEO Alexis George has a significant task on her hands, with the dividend remaining on hold and the demerger of AMP Capital set for 2022.
 
Shares in National Australia Bank (ASX: NAB) were just 0.2% higher after reporting a 10% increase in cash profit to $1.7 billion following a 1% fall in revenue.
 
Net interest margin remains flat with the RBA’s massive stimulus program keeping borrowing costs low.
 
Shares in AGL Energy (ASX: AGL) tanked, falling 5.5% after the company reported a 33% fall in underlying profit and a $2 billion loss when write-downs are included, with wholesale electricity prices the major detractor.
 
More records, Airbnb sales jump on reopening, healthcare rallies
 
US markets pushed to new highs once again with the Dow Jones adding 0.04%, the S&P 500 0.3% and the Nasdaq 0.4% following yesterday’s confirmation that inflation may be abating.
 
Similarly, those seeking unemployment benefits fell for the third week. Healthcare and technology were the key contributors with Apple (NYSE: AAPL) adding 2% and NVIDIA (NYSE: NVDA) 1%.
 
Share markets have nearly doubled since the depths of the pandemic. China was in the spotlight once again after the Communist Party released a five-year blueprint for the economy that calls for greater regulation of technology companies and those with significant monopolies.
 
Those expected to face more laws include food and drugs, big data and AI. Airbnb (NYSE: ABNB) appears to have navigated the pandemic reported a quadrupling of revenue to US$1.3 billion from US$335 million, a 10% increase on 2019 levels.
 
This bodes well for a return to travel in Australia once the vaccination rate is increased.