Did some quick calcs. on the closing price of $3.04.
Using a cost of capital of 5.8% earnings per share works out to about 18 cents per share (29 cents last year and 21 cents in the first six months) and a market expectation of earnings at about 281m for the year(428m last year and 352m half year). In short the market has put an expectation that QAN will show a loss of 71m in the later half. What is interesting is that at $3.20 the market had an expectation of 19 cents per share and 60 million shares were traded over that one cent per share. PE of about 16.8.
Last year's revenue was $11.3bn and based on these calcs. market expects revenues around $7.5bn or a decline of about 34%. Consider that the half yearly report had a revenue of $5.8bn this means that the company is expected to earn $1.7bn in the later half (or about 29% of the first half).
If this scenario is right then the primary issue for Mr. Dixon and his team will be to come up with a short to medium fix to manage the expenses and idle planes. He will need to keep expenses down to about $6.4bn (last year $10.6bn.) or a decline of about 39%. Need to consider that first half expenses were $5.4bn and that means he will need to get expenses down to about $.9bn - a tall order in the short term. Unfortunately, the staff will be severly hit.
SARS hit in sometime in March and that is about 3 months into the half year and after the holiday season. The company will have to manage a difficult situation for the last four months.
Based on this argument I think that the EPS will be higher than the expected 0.18 cents. Frankly, I think that the issue is serious but I also think that the market has over reacted and I suspect that hedge funds made a killing on the way down and they will also jump in on the way up.
I bought at $3.05.
This is only my opinion.
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some fundamental calcs.
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Last
$6.08 |
Change
0.030(0.50%) |
Mkt cap ! $9.907B |
Open | High | Low | Value | Volume |
$6.07 | $6.10 | $6.04 | $24.68M | 4.065M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 22446 | $6.04 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$6.08 | 11616 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 22446 | 6.040 |
5 | 44194 | 6.030 |
3 | 24987 | 6.020 |
2 | 9150 | 6.010 |
3 | 2150 | 6.000 |
Price($) | Vol. | No. |
---|---|---|
6.080 | 11616 | 2 |
6.090 | 20649 | 2 |
6.100 | 144428 | 28 |
6.110 | 22709 | 9 |
6.120 | 20180 | 8 |
Last trade - 16.10pm 29/07/2024 (20 minute delay) ? |
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