Massmart Drops Most in 11 Months on Profit: Johannesburg Mover
Massmart declined 3.1 percent, the most since September 12, to 170 rand at the close in Johannesburg.
Adjusted earnings per share in the 52 weeks through June 24 rose to as high as 5.80 rand, Massmart said in a trading statement today, missing the 6.82 rand average estimate of 14 analysts compiled by Bloomberg. Earnings before foreign exchange effects and costs related to Wal-Mart Stores Inc. (WMT)’s purchase of a controlling interest in the South African retailer rose to as much as 6.80 rand, the company said.
“These shares have been priced for perfection, so even if they are good results there are risks of being knocked back at these levels,” Ferdi Heyneke, a trader at Afrifocus Securities in Johannesburg, said by phone today.
Massmart shares have climbed 28 percent since Bentonville, Arkansas-based Wal-Mart, the world’s biggest retailer, announced June 20, 2011, it had acquired a 51 percent stake in the company for 16.5 billion rand ($2.02 billion). Massmart trades at 35.2 times earnings, compared with the FTSE/JSE Africa General Retailers Index (JGENR) which has a price-to-earnings multiple of 20.2.
Massmart will announce its audited result on Aug. 22, according to the statement.
To contact the reporter on this story: Janice Kew in Johannesburg at email@example.com
To contact the editor responsible for this story: Celeste Perri at firstname.lastname@example.org