August 2025 Results – The Wrap

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This story features GOODMAN GROUP, and other companies.
For more info SHARE ANALYSIS: GMG
The company is included in ASX20, ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

Download related file: FNArena-Reporting-Season-Monitor-August-2025

Final stats and insights from a reporting season in August that has surprised on so many fronts.

By Rudi Filapek-Vandyck, Editor

The August 2025 results season will be remembered for its subdued earnings performances (and equally moderate guidances) by investors who keep track of underlying fundamentals, but also because of the relentless positive momentum that had gripped the share market post the April sell off.

The discrepancy between these two opposing forces might have created a general impression that all is well and corporate Australia is in good nick because, well, that’s the general impression that sticks when share market indices rally to new all-time record highs.

Others worry markets are ignoring fundamentals. In the absence of decent and sustainable earnings growth, markets cannot simply continue reaching for new highs, can they?

By the end of August, the ASX200 was trading on 19.9x times next year’s consensus earnings forecast. This is usually a multiple reserved for US equities. No wonder one of the most popular topics on social media throughout and post August results is: when the correction?

In a heavily polarised market, also because the precise impact from AI is still largely guesswork and unquantifiable (except for businesses such as Goodman Group ((GMG)) and NextDC ((NXT)), the debate rages uninterruptedly, but answers might no longer be as straightforward as once upon a time.

The Basic Facts

Let’s start with the basic facts.

Consensus EPS forecasts had sunk to minus -1.8% ahead of the season and by the end of it that number had further declined to -3.10%.

And so FY25 became the third consecutive negative year for corporate Australia which in aggregate has now seen peak earnings achieved in FY22 (coming out of pandemic lockdowns) erode away by some -19%.

The consensus forecast for FY26 puts the combined average EPS growth for the ASX200 at 4.5%, which is roughly around the long-term average, but still with a negative bias as some -1% of next year’s prospect went missing in August.

Two factors played a major role throughout the month. Institutional investors have begun preparing for a broadening of share market momentum away from the limited selection of winners, this time also including cyclical discretionary retailers, resources and smaller cap companies.

Plus those with a more optimistic outlook are anticipating underlying momentum will improve into next year and that 4.5% growth forecast will start to rise again.

That was before RBA governor Michele Bullock attempted to temper general expectations there will be two or more rate cuts still forthcoming in the months ahead. Maybe that will be the case, but maybe not.

It remains an open question how well the domestic economy will fare without further support from the central bank. Judging from company statements and from analysts’ reviews of company results and prospects throughout the month, a lot seems to be riding on expectations of further interest rate cuts.

The strongest indications might well have come from the earnings results itself.

Judged purely by whether earnings results meet, beat or missed forecasts places ‘beats’ and ‘misses’ on par in August, which is not great. Normally a decent season sees more upside surprises than downside disappointments.

FNArena’s Monitor takes it one step further; our measurement also includes forward guidance and a broader set of financial metrics and their impact on analysts’ forecasts.

On this broader approach, August 2025 marks the worst result season in the history of the FNArena Monitor, starting in August 2013.

The gap witnessed between ‘misses’ and ‘beats’ has never been as wide and in favour of the negative with the end result seeing 21% of results marked as a ‘beat’ and 30% as a disappointment.

What is equally noteworthy is for the first time in those 13 years of earnings monitoring, each season over the past twelve months (August to August with February and two in between) has generated more ‘misses’ than ‘beats’.

A cynic might conclude a whole lot seems to be riding on the RBA delivering more rate cuts, and with better impact than what has to date occurred on the other side of the Tasman Sea.

Record volatility

August 2025 set all kinds of new records. The ASX200 surpassed for the first time ever the 9000 mark. But equally as remarkable was the spike in volatility.

Reporting seasons in Australia have noticeably become more volatile in recent periods and after February this year data analysis by Goldman Sachs revealed no less than 20% of all companies reporting saw their share price respond by 10% or more (both directions).

That was kind of unheard of in Australia. Wilsons’ data analysis for the August season puts the comparable percentage on 30%, meaning almost one third of all market updates triggered share price moves of 10% or more.

Equally remarkable: this time around large cap companies were dragged into the extreme turbulence as well with companies including AGL Energy ((AGL)), CSL ((CSL)), James Hardie ((JHX)), WiseTech Global ((WTC)) and Woolworths Group ((WOW)) among prominent names that were severely punished upon disappointment.

Healthcare yet again had a disappointing season.

Stood out in a positive manner: contract services providers, discretionary retailers, property developers, REITs, and gold miners, though the latter had more to do with bullion rallying to a fresh all-time record high.

Smaller caps featured prominently on the positive side. The All-Ords Small Caps gained more than 8% in August on the back of explosive gains for the likes of Coronado Global Resources ((CRN)), IDP Education ((IEL)), Pilbara Minerals ((PLS)), Codan ((CDA)) and Vault Minerals ((VAU)).

The gold sector gained 20% over the month.

Underneath the surface, the share market remains extremely polarised as also mirrored in the heavy skew in brokers’ ratings. Historically, an index rallying to a new record high would coincide with those ratings favouring more Neutral/Holds and Sells, but not so in 2025.

Post covid, the balance has swung decisively in favour of mostly Buys and equivalents, and that skew remains in place today. Some 59% of all ratings are Buy versus 32% Neutral/Holds and less than 9% in Sell ratings.

No surprise thus, August featured more downgrades (83) than upgrades (53), though both numbers are not that extreme when compared with data from previous seasons.

****

A copy of the Monitor (final version) is attached (see top of this story).

Paying subscribers can access all prior reviews, data and stats going back to August 2013: https://fnarena.com/index.php/reporting_season/

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