Australian Stock Market Report - Midday 2/9/2012

LUNCHTIME REPORT
(12pm AEDT)

Australian stocks have eased on open, following a mixed offshore lead and generally lower commodity prices. At lunchtime in the East, the All Ordinaries Index (XAO) is lower by 27.8pts or 0.6pct to 4335.9.

It's a busy day on the reporting calendar, with media conglomerate News Corporation (NWS) and Telstra (TLS) among those releasing earnings. Mining giant Rio Tinto (RIO) will report Full Year results after the bell.

Telstra has reported a slightly lower than expected profit of $1.47 billion for the six months to December 2011. The 1H 2012 result is up 22.5pct on the previous corresponding period, but below estimates for earnings around $1.513 billion. As already flagged, Telstra shareholders will receive an interim dividend of 14 cents per share. Telstra is trading lower by 2pct to $3.37 at lunchtime in the East.

Meanwhile News Corporation has beaten expectations with a 65pct increase in second quarter earnings to US$1.06 billion. The success was largely driven by the company's film and cable television units, thanks to box office sales of movies such as Alvin and the Chipmunks: Chipwrecked and the George Clooney film The Descendants. Shareholders will receive a 2Q dividend of US8.5c per share, up 13pct from the previous corresponding period. NWS shares are firmer by 2pct to $19.10.

Also reporting today, gambling products company Tabcorp (TAH). Tabcorp's result was better than the market had expected with Net Profit After Tax (NPAT) growth of 14.1 pct to $189.3 million for its continuing operations, even with a lacklustre spring carnival. Revenue increased by 2.8pct thanks to strong growth in Tabcorp's waging division and a big pick up in its online "TRACKSIDE" business. Tabcorp management was also very happy with its record growth from its Keno business. TAH shares are up 3.5pct to $2.96.

Rio Tinto (RIO) is releasing results after the bell, with expectations of a US$15.4 billion NPAT, a 13pct increase on last year's result.

The Australian dollar is buying US107.6c, £0.6808 and €81.26c.

Juliette Saly, CommSec Market Analyst

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