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Shares fall as companies miss expectations

NZ NewswireNZ Newswire 24/08/2016 Jonathan Underhill

New Zealand shares fell, led by A2 Milk and Meridian Energy as hopped-up investors who have driven the benchmark index to record highs weren't satisfied with results that broadly met expectations.

The S&P/NZX 50 Index fell 57.03 points, or 0.8 per cent, from a record high to 7410.30. Within the index, 32 stocks fell, 13 rose and six were unchanged. Turnover was $212 million.

A2 dropped 8.7 per cent to $2.10, even after reporting a return to profit that met its guidance in June and posting a 127 per cent gain in revenue. The company sees more growth in the 2017 year in infant formula and milk powders, it said.

Meridian fell 2.2 per cent to $2.88 despite posting a 5 per cent gain in pretax earnings and announcing a special dividend of 2.44 cents a share on top of a final dividend of 8.4 cents, of which 90 per cent was imputed.

"All these companies have been coming out with good results and that's what the market has been paying for so now it is saying great, what's next," said Shane Solly, a director at Harbour Asset Management.

He said the New Zealand market has been "an absolute rock star" but is also "quite finely tuned at the moment."

Genesis Energy, which also reported on Wednesday, fell 3.3 per cent to $2.195. Its full-year operating earnings slipped 2.7 per cent, which it said reflected lower electricity, gas and oil prices combined with ongoing retail market competition.

Vector fell 1.1 per cent to $3.49 after reporting a 4.7 per cent gain in adjusted full-year earnings on growth in Auckland and the expansion of its smart meter fleet, while signalling earnings growth may stall in 2017.

Fisher & Paykel Healthcare declined 2.6 per cent to $9.95 and Spark New Zealand fell 2.2 per cent to $3.815. Goodman Property Trust dropped 2.2 per cent to $1.35.

NZ Oil & Gas rose 7.1 per cent to 52.5 cents after the company said it will resume dividend payments, having clamped down on costs in response to the slump in global energy prices.

Wynyard Group tumbled 16 per cent to 31 cents, while Metro Performance Glass, which has more than half the country's glass processing market, rose 2.4 per cent to $2.15. NZ Refining gained 2.5 per cent to $2.42

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