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Shares fall, Fonterra drops after earnings

NZ Newswire logoNZ Newswire 22/03/2017 Sophie Boot

New Zealand shares fell on Wednesday, with Fonterra Shareholders' Fund and Fletcher Building dropping.

However, Sky Network Television rose after the pay-TV company said it will challenge the regulator's decision to decline its Vodafone merger.

The S&P/NZX 50 Index dropped 24.71 points, or 0.3 per cent, to 7,060.83. Within the index, 30 stocks fell, 12 rose and eight were unchanged. Turnover was $171 million.

Dual-listed banks led the index lower, with ANZ Banking Group down 2.7 per cent to $33.56 and Westpac falling 2.7 per cent to $36.50.

Units in the Fonterra Shareholders' Fund fell 0.6 per cent to $6.18.

Fonterra Cooperative cut its forecast for full-year earnings per share while maintaining its projected milk payout, citing volatility in returns from ingredients, tightening margins and potential increased milk supply in the autumn.

The dairy exporter downgraded its forecast while releasing first-half results which showed revenue climbed 9 per cent to $9.2 billion. Normalised earnings before interest and tax fell 9 per cent to $607 million in the six months ended Jan. 31. Net profit rose 2 per cent to $418 million.

"The result was a bit of a mixed bag really," said Peter McIntyre, investment adviser at Craigs Investment Partners.

Fletcher fell 0.2 per cent to $8.34. The shares plunged over 10 per cent on Monday after it unexpectedly cut full-year earnings guidance by $110 million because of losses related to construction projects.

"A lot of investors are wanting to sit on the sidelines and see what happens," Mr McIntyre said.

New Zealand Refining dropped 1.7 per cent to $2.35. Its gross margins edge higher in the first two months of the year with strong throughput at the Marsden Point refinery.

Sky TV was the best performer, up 6 per cent to $3.69. Sky TV and Vodafone New Zealand will lodge appeals against the Commerce Commission's decision blocking their merger.

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