Shares in Macquarie Group have taken a tumble after the Australian investment bank left earnings guidance for 2017 unchanged owing to a mixed performance from its business units.
In a trading update for the first nine months of its fiscal year, Macquarie reiterated it expected its result for 2017 to be “broadly in line” with 2016, when it reported a record net profit of A$2.06bn ($1.57bn) in the 12 months to March 31. After its full-year result last year, it warned that earnings would be flat in the 2017 financial year.
Nicholas Moore, Macquarie’s chief executive, said trading conditions across the group were “satisfactory” in the December quarter.
The net profit contribution from its annuity-style business, which has been a solid performer in recent years, in the December quarter was up from a year ago, but was “slightly down” over the first nine months of the fiscal year compared to FY16.
Net profit contribution from the company’s capital markets division was down from a year ago for both the December quarter and nine months-to-date periods.
Macquarie’s share price closed at a record high A$88.80 in January, and the bank has consistently delivered earnings upgrades and solid growth over the past few years, making it an investor favourite. Today, some of that sentiment had unwound, with the stock down 2.6 per cent at A$81.775 in Sydney and at one point down as much as 3.4 per cent.
It was the second-worst performer in the S&P/ASX 200 financials sector, with that sub-index down 1.1 per cent. The benchmark S&P/ASX 200 was off 0.4 per cent this morning.