‘Huge change': ASX falls as CSL announces new business plan

News.com.au

a day ago

Australia's sharemarket snapped a six-day winning streak after pharmaceutical giant CSL had its worst day of trading on record after announcing a disappointing earnings update.
The ASX 200 index dropped 63.10 points or 0.70 per cent to 8,896.20 while the broader All Ordinaries fell 59.70 points or 0.65 per cent to 9,173.80
The Australian dollar slipped 0.14 per cent to 64.85 US cents.
Seven of the 11 sectors ended higher but a slump in the healthcare sector led to the market downturn.
Healthcare stocks fell 8.73 per cent, led by CSL shares which slumped 16.89 to $225.50 its biggest ever one day fall, despite reporting underlying profits were up 14 per cent to $3.3bn.
This was a fall of around $21bn in market cap.
Shares plunged in the healthcare giant after it announced it would cut 3000 global roles costing $770m initially before helping the business save $500m-$550m over three years.
CSL also announced its intention to demerge its influenza prevention vaccines-focused unit known as Seqirus into a separate ASX-listed business in 2026.
It will also combine the commercial and medical operations of its core blood plasma and iron deficiency businesses into one unit.
eToro market analyst Josh Gilbert said while the restructuring comes with a sizeable one off cost, the move is expected to sharpen the group's focus on its high-growth plasma and kidney care business.
'For investors, the view here is that CSL is trying to create a clearer business structure and improve investor returns. However, markets hate uncertainty, and this shake-up brings plenty of it,' he said.
'These are huge changes that come with execution risk, and in my view, the market will react poorly to the news short term.'
Australia's second-biggest company BHP jumped 1.57 per cent to $42.12 after the business delivered its latest financial update.
The company reported underlying profits of $US10.2bn ($A15.7bn), a 26 per cent fall compared with last year.
Revenues came in at $US51.3bn ($A79bn), an 8 per cent fall in 2024.
Despite falls in revenue and earnings, chief executive Mike Henry called the results 'a strong performance'.
'FY25 was another strong year for BHP, marked by record production, continued sector-leading margins and disciplined capital allocation,' he said.
'Safety remains our highest priority and we achieved year-on-year improvements across key metrics.'
Shares in iron ore rivals Rio Tinto and Fortescue were down 0.22 and 0.15 per cent respectively.
Financials were a brighter spot, with all four banks gaining.
CBA added 0.51 per cent to $171.05, Westpac gained 0.65 per cent to $37.31, NAB jumped 0.77 per cent to $40.54 and ANZ finished 0.61 per cent higher to $32.77.
In company news, Seek was one of strongest performers on the ASX 200 after it announced an increase in revenue despite fewer job ads, leading to a 7.99 per cent bounce to $27.72.
Australia's largest manufacturer and distributor of 4x4 accessories ARB shares marched 8.55 per cent higher to $39.49 after the business told the market sales revenue was up 5.3 per cent to $729.9m, while net profits after tax were down 5 per cent to $97.5m.
Judo Capital also eked out a gain of 0.29 per cent to $1.75 after full-year profits were up 24 per cent to $86.4m, on the back of a lift to its all important net interest margin.
Reliance Worldwide shares fell 6.74 per cent to $4.29 despite the business announcing sales were up 5.5 per cent and reported net earnings after tax jumped 13.5 per cent to $US125m ($192m).