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With reporting season over for another six months, analysis by firm CommSec has found 94 per cent of companies on the ASX 200 that reported made money, which means all but eight of the 142 companies produced a profit for the six months to December.
Meanwhile, 88 per cent of companies chose to pay a dividend according to CommSec.
"It was a better reporting season. Six months ago there were some question marks over earnings, but this time around [we're] a little bit better," John Murray, managing director of Perennial Value, which manages around $8.7 billion of funds, told ABC News Online.
"We do have profit forecast factored in for the next 12 months for the companies we analyse in the stock market. Not massive growth, but there's nothing wrong with that, single digit growth."
The strongest earnings came from the resources sector, while there was improvement in the banking sector, both of which make up a majority of the Australian share market.
Mr Murray said companies which Perennial Value has a stake in - including Woodside Petroleum, BHP Billiton, Rio Tinto and LendLease - posted solid results.
CommSec attributed the bumper season to rising commodity prices and a record-breaking home building boom. Profits rose 123 per cent over the year to $28.8 billion.
"Before the earnings season, the Aussie share market could be considered slightly overvalued with an historic price-earnings ratio sitting near 17, above the longer-term average of 15.7," wrote Craig James, economist at CommSec in a report wrapping up the earnings season.
"But the latest earnings results justify the recent gains in the share market.
"With the economy gaining momentum in recent months, share prices have scope to track profits higher - particularly in light of the super-low interest rate environment."
Average earnings per share rose by 19 per cent over the past six months, while aggregate cash holdings rose by 12 per cent on June levels to $83 billion.
CommSec did not include BHP Billiton in the aggregate result, as the mining multinational swung from a loss of $US5.7 billion to a profit of $US3.45 billion, which would have skewed the findings.
Another trend seen during this reporting season has been the changing of chief executives and chief financial officers, which occurred in companies including Aurizon, Brambles, Crown Resorts and Origin Energy.
Mr Murray said, though Perennial are long term investors, the fund did change positions after some of the earnings results.
"One stock that we held coming into reporting season was Vocus, the telco which has been very much out of favour over the last six to twelve months for a whole host of reasons, we like the long term outlook for Vocus, but we've held up buying more just over the last month or so," Mr Murray said.
"But their half-year profit result was quite reassuring, and on the back of that, we've bought more Vocus since then."
The worst performing sectors were broadcasting and asset management.
CommSec noted that media companies continue to be challenged by global competition and technology.
"While it is clear that balance sheets across corporate Australia are in strong shape, with profits up and cash holdings at high levels, there is no consensus about what to do next," Mr James wrote.
"Some companies are focussed on cutting debt, some remain determined to pay solid dividends; some have announced share buy-backs and others are focussed on just keeping balance sheets strong."
Topics: stockmarket, company-news, business-economics-and-finance, australia