KEY POINTS:
One of the most anxiously awaited reporting seasons in years gets into full swing on Thursday, with Fletcher Building expected to announce a big slide in half-year profits.
Over the next two weeks many of the country's biggest companies will deliver their first results since the full force of the global market meltdown hit last September.
Telecom is due to report second quarter earnings on Friday.
While earnings are expected to be down, investors will look for any signs of weakness in company outlooks.
Rob Mercer, head of research at Forsyth Barr, has projected $161 million net profit after tax for Fletcher Building in the December 31 half-year, well down on last year's $235 million.
But he still has a "buy" recommendation on the stock and says the business remains fundamentally strong.
"They're in a good, strong position and don't have to raise equity," he said, referring to a string of Australian businesses needing to raise cash.
Mercer has forecast profit of $318 million for the June full-year, down from last year's $467 million but said Fletcher Building had a robust balance sheet.
His valuation of $10.68 on the shares - which closed at $5.52 on Friday - reflected the strength of the business.
Fletcher shares traded to a high of $12.95 last October before slumping with global stocks.
"Things are falling rapidly and there's quite big softening in large private sector construction and the dairy and energy sectors. There's been a complete turnaround in fortunes," Mercer said.
Fletcher, which had no trouble in raising $100 million in capital notes last month, is one of New Zealand's biggest listed companies, with a market capitalisation of $2.7 billion behind Telecom's $4.8 billion and Contact Energy's $3.9 billion.
Matt Henry, of Goldman Sachs JBWere - who forecast $179 million half-year NAPT and full-year $296 million - said the first-half result would be better than the second-half.
"New Zealand residential [building] is showing dramatic signs of weakness. Australia residential approvals are very poor and have fallen dramatically in the last few months.
"Fletcher benefited from some good steel margins when steel prices were high, but scrap prices were low, which was an anomaly. But they're operating in an adverse environment," Henry said.
The company told shareholders at its AGM in November that the current range of analysts' forecasts for net earnings - excluding unusuals for the full-year to June 2009 - was $289 million to $354 million.
"If current trading conditions are maintained, then net earnings for the full year should be within this range. The range reflects significant level of uncertainty globally.
"The current intention is to maintain dividend at same cents per share as 2008. The final decision dependent on financial outcome for the year," chairman Rod Deane said at the time.
The full-year result will be announced in August, and in an unusual step, the AGM held on November 11 in Dunedin. Fletcher Building has always held its big shareholder events in Auckland.
But the meeting will mark the centenary of the original Fletcher business being founded there.
Interim results season:
Thursday: Fletcher Building
Friday: Telecom
Feb 16: Freightways
Feb 18: Tourism Holdings, Vector
Feb 20: Michael Hill
Feb 23: SkyCity Entertainment
Feb 24: Pumpkin Patch
Feb 25: NZ Oil & Gas, Goodman Property Trust
Feb 26: Nuplex, PGG Wrightson, Air New Zealand
Feb 27: Guinness Peat Group (Full Year)
March 12: The Warehouse
