AZJ reported its FY17 EBIT of $836m and guided towards FY18 EBIT growth of 8 – 11% or $900 – 960m.
Losses in both Intermodal and bulk divisions were higher than market expectations. Dividends were reduced to $0.225 for the year but this was offset by the company announcing a $300 million share buy back.
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We feel FY18 EPS growth may be optimistic and the reduced dividend is something we’ve been flagging as a potential concern coming into this result.
Assuming dividends remain flat over the next 12 months, it places AZJ on a forward yield of 4.4%.
