What: The S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is down 0.4% in late afternoon trade. However, upon the release today of Computershare Limited's (ASX: CPU) full-year profit result, investors have marked down the shares by 85 cents or 6.74%. One would think a 60% increase in statutory net profit would satisfy the market, but obviously not.
So why the negative price reaction?
Comments made regarding the outlook for FY2015 seem to be the main contributing factor to the share slide. These included:
1. Lower yields on client balances. Given that Computershare has an approximate US$6 billion float there are downside implications should interest rates remain low.
2. Lower forecast earnings per share (EPS). Previous guidance for the FY2014 year was for growth in EPS of 5% to 10%. For FY2015 guidance is for around 5%.
3. Several large listings had not eventuated according to CEO Stuart Irving. Although at the same time he did refer to an improving sentiment for the IPO market, mergers and corporate actions.
4. A drop in revenues for the business services segment, due to continued weak market activity in the bankruptcy administration business in the U.S.
Stuart Irving also stated that: "The big things that will affect the numbers is what is going to happen with interest rates and also corporate actions".
