Jittery wait for Carter’s figures

The market is bracing itself for a big backlash against wood products company Carter Holt if its first-quarter result - due Wednesday - fails to deliver.

After the company heavily downgraded its profit forecast last month, analysts believe its share price could be severely punished if further signs of hard times are shown by the numbers.

The shares fell to an 18-month low of $1.96 after Easter when $30 million was wiped off the timber company's profit forecast. They closed at $1.98 on Friday.

The profit warning forecast an operating profit of between $45 million and $50 million for the March quarter - meaning it could be over 40 per cent lower than the $77 million earned in the same quarter last year.

The company has said the extent of the downgrade is inflated by the use of new international financial reporting standards (IFRS) for the first time.

This means having to include the full impact of maintenance shutdowns and no longer including goodwill amortisation. Weak demand for wood products, especially in Australia, has added to the decline.

Carter Holt spokesman David Jamieson said at the time of the downgrade that the company had already flagged that the first quarter would be tough and the result should not be a huge surprise to investors.

Looking ahead, the company has said it expects an improvement in market conditions in the second half of the financial year.

Forsyth Barr analyst John Cairns is expecting a first-quarter operating profit of $47 million. 

"We are forecasting a reported profit of $25 million for the first quarter and note this is exclusive of the forest revaluation which is required under IFRS," Cairns wrote in a research report.

Investors will next week be hoping for news on the completion date for the sale and purchase of Tenon's Structural businesses. Both parties have said they are confident the deal will be finalised by the end of April.

Questions are also likely to be asked about who will win a trucking contract worth about $100 million for the company's New Zealand manufacturing operations.

Linfox and Matrix - a joint venture between NZL and Provincial Freightlines - are the final two contenders.

A decision is expected next month, but there will be keen interest in any guidance.

The debacle surrounding the collapse of discount sharebroking firm Access Brokerage takes another step forward this week.

The New Zealand Exchange (NZX) filed charges relating to breaches of NZX Participant Rules against the defunct company (via liquidators Ferrier Hodgson) and former managing director Peter Marshall last week.

Protocol states that those parties must submit their response statements within five working days so a mid-week update is possible, although NZX has said it will not comment on the matter further until the independent body NZX Discipline makes a ruling. Marshall has consistently declined to comment on the firm's collapse.

* Aussies in trouble


Australian investors have been warned to prepare for a sharemarket bloodbath today, with media reports predicting another $A15 billion ($16.1 billion) will be wiped from Aussie share values.

Australian commentators reported a panic among small investors on Friday, when the All Ordinaries fell below 4000 for the first time since December.

Some are picking there will be another 60-point drop on the index today.

A catalyst for the selling pressure - which has been building since the middle of last week - was Friday's 190-point fall in the Dow Jones, its third straight 100-point plus fall. (Additional reporting by Andrea Fox )