Page 7 - FWP Wealth-Adviser-Issue-120 (FWP)

ISSUE 120
SEPTEMBER 2025

BEYOND EARNINGS

LESSONS FROM THE 2025 ASX REPORTING

SEASON FOR AUSTRALIAN INVESTORS depositphotos.com

BY WEALTH ADVISER 10% on results day. Intraday swings were not always
justified by the earnings reports themselves; “small earnings
Introduction: The 2025 ASX Reporting Season— misses saw significant share price moves; similarly, small
Why Investors Should Look Beyond Headlines earnings beats saw large share price movements”. Traders
The 2025 ASX reporting season delivered headlines responded swiftly, with high-frequency trading and rapid
filled with both optimism and unease, as investors navi- capital flows amplifying the gap between sentiment and
gated share price swings, flat earnings, and a surprisingly fundamentals.
resilient market backdrop. This period was marked by For patient investors, this decoupling offers both risk and
outsized moves in both directions, with blue chips like CSL opportunity. While some companies beat expectations yet saw
and Cochlear facing sharp declines, while others such as their prices fall, others with disappointing results rallied after
Brambles and SEEK posted strong gains. As one commen- resetting expectations or highlighting future resilience. History
tator put it, “Despite mixed ASX results, the market has shows that diversified, long-term strategies outperform
shown surprising resilience”. Aggregate earnings across the attempts to chase short-term price action. The key is often to
S&P/ASX200 have been flat or declined even as the index use volatility to rebalance portfolios, reassess goals, and avoid
returned nearly 15% annually. In this environment, the the temptation of acting on “noise” rather than substance.
importance of looking beyond headline figures and quar-
terly surprises becomes clear. The lessons for investors in Sector Winners, Margins, and
2025 centre on understanding the themes behind reporting Pockets of Strength
season, learning from sector trends, and adopting strategies Sector performance in 2025 was highly nuanced, reveal-
that withstand uncertainty. ing important clues for forward-looking investors. In retail,
those with dominant market positions—such as JB Hi-Fi—
Volatility, Resilience, and the Disconnection outperformed their peers in a “soft consumer demand”
between Share Prices and Earnings environment, while companies leveraging technology,
This reporting season was perhaps “the most interest- including the CAR Group, REA Group, and SEEK, maintained
ing… in my 20-odd-year career, with share prices mean- momentum even as others faltered. Insurers thrived,
ingfully diverging from earnings and prospects”. Volatility experiencing some of their “best results season since the
reigned as over 20 ASX200 firms saw moves of more than GFC as they enjoy higher premiums, lower claims inflation,

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