Stockland, Australia’s third-biggest property trust by market value, dropped to the lowest in more than five months after cutting its full-year earnings forecast.
The shares dropped 4.5 percent to A$3 at the close of trading in Sydney, the lowest since Oct. 6 and the second-largest decline on the benchmark S&P/ASX 200 index today.
Profit in the year ending June 30 will be 30.5 cents a share, down from an earlier forecast of 31.6 cents, the Sydney-based company said today in a statement to the Australian stock exchange.
The reduction “highlights the significant impact a weaker residential market can have on group earnings,” analysts led by John Meredith at Morgan Stanley wrote in an e-mailed note. “With weaker conditions persisting and no interest rate relief for now coming through, we believe this heightens the risk of asset impairments by fiscal year 2012 results in August.”
Slower sales from a stalling housing market, mortgage rate increases by banks and prolonged wet weather have pushed settlements expected in 2012 into the next fiscal year, the company said today in the statement. Sales for the rest of this fiscal year will continue to be slow, it said.
“We started to see, in the first week of March, a marked shift in buyer sentiment,” Stockland Managing Director Matthew Quinn said today on a conference call. Any potential rate cuts by the central bank would be “unlikely to achieve any increase in sales that would result in settlements this financial year.”
Stockland shares have fallen 6 percent this year, compared with a 6 percent gain in the benchmark.