Australia's leading corporations have delivered their financial results, with profits exceeding market forecasts.
Notably, BHP and the four major banks reported earnings that significantly surpassed expectations.
With only a few companies left to report, the ASX 200 index advanced 23.3 points, or 0.3%, to close at 9,168.60 points on Friday. This record finish contributed to an impressive 3.7% gain for the index over the month of February.
Consumer Stocks Show Weakness
While some sectors, such as consumer stocks including JB Hi-Fi and Nick Scali, displayed weakness, the overall market sentiment was positive. Companies that disappointed investors, however, faced severe selling pressure.
The strong performance in February marks the third consecutive monthly gain for the ASX 200.
One of the disappointments on Friday was Coles shares (ASX: COL), which fell 7.4% to $20.56 after reporting slower supermarket sales growth compared to its rival Woolworths.
Even Woolworths shares (ASX: WOW), which had surged exceptionally hard on Wednesday to record their largest single-day gain ever, declined 1% to $36 as investors secured profits before the weekend.
Although Coles delivered a reasonably solid result, it paled in comparison to Woolworths' stronger update, showing particular softness in the higher-margin liquor segment.
Investors are now cautiously observing both retail chains as they compete to attract more cost-conscious consumers, with Woolworths currently appearing stronger.
REA Group Continues Strong Performance
In other market activity, the communications sector was lifted by property advertising firm REA Group shares (ASX: REA), which jumped 3.6%, or $5.83, to $166.39.
The materials sector also advanced, driven by significant gains among some of its smaller members.
Rare Earths Sector Gains Momentum
In the United States, MP Materials (NYSE: MP) signed a substantial rare-earths supply contract with an undisclosed automaker, which also boosted local rare earth companies.
Shares in Lynas Rare Earths (ASX: LYC) rose an impressive 10.1% to $18.98, and Iluka Resources (ASX: ILU) followed with a 9.1% gain to $6.75.
Job Cuts Propel Block Shares Higher
One of the most significant moves resulted from widespread layoffs, with Block shares (ASX: XYZ) surging 27.8% to $94.15. The owner of Square and Afterpay announced it would cut 4,000 positions from its workforce of 10,000.
Gross profit for 2025 increased by 17% to US$10.36 billion.
Automotive equipment supplier Bapcor (ASX: BAP) saw its shares plummet 49.3% to 87¢ after resuming trade following a heavily discounted capital raising at 60¢ per share.
Investors digested several negative broker reports warning of rapidly declining earnings per share, significant execution risks, and strong sell recommendations.
The weak consumer sentiment continued, with retailer Harvey Norman (ASX: HVN) shares falling 9% to $5.76. Its first-half results revealed weaker Australian sales, though international performance was stronger.
Investors were also disappointed by a lower-than-expected interim dividend.
The situation could have been worse for TPG Telecom (ASX: TPG) shares, which declined 2.7% to $3.94 despite the company returning to profit, reporting a net profit of $52 million for the half-year.
Subscriber trends were mixed as competition among mobile service providers intensified.
Virgin Australia Focuses on Margins
Shares in Virgin Australia (ASX: VGN) slipped 0.3% to $3.14 after statutory profit fell 27.9% to $341 million. This followed increased taxes and the airline's strategic shift to protect margins rather than pursue aggressive growth.
Shares in digital property exchange PEXA (ASX: PXA) climbed 4.7% to $14.98 after reporting a core profit of $21 million, nearly double consensus forecasts.
Pre-tax margins for its Australian division were particularly robust, rising to 58%.
Shares in financial services company Humm (ASX: HUM) rose 5.3% to 70¢ after the company agreed to establish a new committee to evaluate a $385 million takeover bid.
The committee will not include chairman Andrew Abercrombie, following investor complaints to the Takeovers Panel regarding potential insider trading.
Outlook for the Coming Week
Investors will continue to assess themes from the February reporting season in Australia, even as remaining companies like Life360 and Endeavour release their results.
This will shift more focus onto economic data, with the key release for the week being fourth-quarter GDP figures on Wednesday.
Is Economic Growth Slowing?
Most projections suggest the Australian economy grew by 0.7% in the fourth quarter, as business investment growth decelerated.
The fourth-quarter earnings season is also concluding in the US, with upcoming results from companies including AST SpaceMobile, MongoDB, CrowdStrike Holdings, Broadcom, JD Sports Fashion, and Costco.
Several significant US economic reports are also due, covering manufacturing, services, employment, and farm payrolls.
Ongoing negotiations concerning a potential US military strike on Iran will also be closely monitored by markets.
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