Shares of Macquarie Group, Australia’s largest investment bank and asset managers, experienced a downward trend after the company reported “substantially down” earnings for the first quarter of fiscal year 2024. This news comes as a disappointment to some analysts who had higher expectations.
The stock price fell by 4.3% to $175.07 Australian dollars (US$118.33), reaching a low of A$174.34. Macquarie Group is currently one of the worst-performing stocks on the ASX 200 index.
Macquarie Group stated that trading conditions weakened during the three-month period ending in June, resulting in a significantly lower contribution to net profit from its operating group compared to the previous year. The company also reported that its annuity-style businesses and markets-facing businesses had both experienced a substantial decline in net profit contributions.
Citi analysts previously estimated first-quarter earnings to be around A$1 billion, representing a 25% decrease compared to the prior year due to strong gains cycling out. However, it seems that Macquarie Group’s earnings have fallen below this estimate.
Citi analysts anticipate further weakness throughout fiscal year 2024, which could lead to negative earnings revisions and a decline in the stock’s value.
Despite this setback, Macquarie shares have shown a 4.9% increase since the beginning of this year.