Azzet reports on three ASX stocks with notable trading updates today.
Austin Engineering dives after mixed update
Shares in Austin Engineering (ASX: ANG) were down around 10% at the open after the small cap stock posted a two-edged guidance update today.
At first glance, the projected uptick in FY25 revenue guidance to around $370 million, up from the $350 million forecast in Austin’s most recent guidance - 18% up on FY24 – on the back of strong performances in the Americas, notably the U.S. and Chile - gives shareholders something to smile about.
Higher orders in the U.S. follow the previously announced manufacturing capacity expansion, which will be largely in place and operational by the end of April 2025.
With the additional capacity in the U.S. now operational, the company is now focusing on improving plant efficiency, which is expected to deliver higher margins in the future.
While Austin recently won a strategically important and potentially multi-year contract for the supply of truck bodies to be delivered from its Chilean facility, a major ramp up required to fulfill the contract has strained the facility's capacity.
With discussions about price variations having proven to be unsuccessful, Austin now plans to redirect a significant proportion of production fulfilment of this contract to its manufacturing facility in Batam.
While this is expected to progressively allow for an improvement in the project margin - in parallel with the development of the Chile site facility – the underlying earnings forecast has been adjusted to around $41 million from around $50 million.
Commenting on today’s update, Austin CEO David Singleton told investors the company is working to address and improve efficiency in its Chilean operations.
“We remain confident about the potential size and longevity of the contract in Chile and therefore the potential for future profitable revenue growth, and we are committed to improve operational efficiencies in this business unit to achieve better margins,” said Singleton.
“At the end of April 2025, the group total order book remained over $200 million and up 5% compared to the same time last year.”
Austin has a market cap of $206 million; the share price is down 37% in one year and down 34% year-to-date.
The stock’s shares appear to be weak with little demand from investors.
Consensus is Strong Buy.
Zip Co rallies on earnings upgrade
Shares in Zip Co (ASX: ZIP) were up around 17% at the open after the Buy now, pay (BNPL) later giant upgraded its earnings guidance.
Due to further growth in the U.S. the company has increased its earnings guidance to $160 million from $153 million.
Today’s share price jump means the stock’s value has more than doubled (up 124%) since its ascent from a low of $1.19 in early April.
Reflecting the resilience of its business model and strategic execution, the company reported over 40% year-on-year growth in total transaction value (TTV) in the U.S. for May 2025.
What’s also added additional momentum to Zip's share price growth is Zip’s buy-back program with $22.6 million of its authorised $50 million already used to repurchase 12.3m shares.
Within today’s update the company also reported no material changes to its credit loss performance since 3Q FY25 across the U.S. and A&NZ markets.
Today’s share price jump follows a notable rise yesterday (6%) on the back of newly announced regulations governing the BNPL sector in Australia coming into effect.
Zip Co has a market cap of $3.4 billion; the share price is up 43% in the last month.
The stock appears to be in a medium-term rally confirmed by multiple indicators.
Consensus is Strong Buy.
Fletcher Building jumps ahead of takeover offer its construction division
Shares in Fletcher Building (ASX: FBU) were up around 8% at noon after the Kiwi-based building stock flagged that suitors are circling to pick up parts of its overall operations.
While any prospective buyer of the company’s businesses would face a range of legacy issues, the stock appears to be in the eye of a potential cyclical upswing.
Today’s update is a welcome relief for our shareholders following revelations last Friday that it was being sued by fellow ASX-listed Kiwi Stock, Sky City Entertainment Group (ASX: SKC) for NZ$330 million over losses relating to the six and a half year delay in completing the NZ international convention centre.
A more detailed update on recent developments will be shared with the market on Investor Day on 24 June.
However, it is understood that offers have been made for the company’s construction division.
Last month, the company announced plans to save around $15 million in an Australian divisional restructuring and review of the company’s corporate structure.
The struggling Kiwi builder plans to axe its Australian operation as a standalone division.
Instead, the company plans to create two new trans-Tasman divisions: light building products and heavy building materials.
Fletcher Building has a market cap of $3.2 billion; the share price is up 18% year-to-date.
The stock appears to be in a long-term uptrend as confirmed by multiple indicators.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.
