“While market consensus expectations are for a 20% increase in earnings per share over the next 12 months, there is some risk that these expectations are toned down post [the] reporting season, should company management remain conservative in their outlook statements, given mixed near-term trading conditions,” he said.

“We remain optimistic that companies that have implemented self-help profit improvement programmes over the last one to three years may start to show the benefits of these strategies, providing upside to profitability from better operating leverage.”

Solly said a period of heavy rain may underpin a recovery in earnings from the big-cap, hydro-dominated generator-retailer sector, but a reasonable proportion of the expected earnings growth would be driven by a recovery in the aged care/retirement, tourism, technology and materials sectors.

“Given the strong rally in mid and small capitalisation shares that are more sensitive to domestic economic activity over the last half of the 2025 year, the reporting season will need to confirm whether this rally can continue.”

Positive bias

Forsyth Barr analysts said they had a strong positive bias going into the first reporting season for 2026.

“We don’t expect the results themselves to be particularly world-beating relative to expectations, with 1H26 likely to be a game of two halves for those companies with economic sensitivity,” they said.

Margins and expected margin recovery will be of particular interest.

“Many New Zealand corporates have had three-plus years to right-size their businesses, therefore how they speak to operational improvements, cost control and operating leverage will be key.

“As analysts, we think we have well captured the long expected margin/earnings recovery, but this season will be the first litmus test.”

Forsyth Barr said New Zealand’s limited history of recessions meant the market often underappreciates both the magnitude of downturns and the true potential of cyclical recoveries.

“When the cycle turns, corporate cost bases have typically been cut aggressively, and management teams – hesitant to reverse these reductions – continue trimming where possible.

“This reluctance to re-expand costs creates strong operating leverage. As a result, net earnings growth during upswings can surprise to the upside, often materially outpacing consensus expectations.”

Among the stocks Forsyth Barr expected to have a positive bias in their results was a2 Milk, thanks to a string of recent positive data points.

Contact Energy was another, as it continued to perform well, as highlighted by its latest operating statistics.

On Freightways, Forsyth Barr said a strengthening volume environment and strategic merger and acquisition benefits suggested earnings risks remained to the upside.

In the neutral category, the broker included Auckland Airport.

A weak result from Fletcher Building was largely expected.

Commenting on NZME’s annual result, Forsyth Barr said the company’s cost-out benefits should support margins, “but soft advertising conditions and a lack of clear OneRoof catalysts in the near-term limit upside”.

NZME publishes the New Zealand Herald.

On the downside, the broker said a difficult loss-making period should mark the low point in Air New Zealand’s earnings cycle.

For Steel and Tube, large losses and balance sheet questions will likely overshadow a pick-up in volumes, it added.

Fisher & Paykel Healthcare rallies

Looking beyond the upcoming season, Fisher & Paykel Healthcare (FPH) – the market’s biggest stock – is expected to report its March 31 year result in May.

Craigs Investment Partners (CIP) expects a strong outcome from FPH, whose shares hit a record high this week.

Craigs said that overall, its analysis suggests “FPH’s FY26 revenue will be below the top end of guidance” but margin expansion will drive net profit to be at the top end of the guidance range (CIP $464m versus consensus $455m and guidance $410-460m).

Pie Funds and Altered

Pie Funds has formed a new partnership with Altered Capital, becoming the first KiwiSaver provider to invest in the New Zealand venture capital firm.

The investment will form between 2-4% of the Pie KiwiSaver Scheme Aggressive Fund, giving members access to a concentrated portfolio of high-growth private New Zealand technology firms, Pie Funds said.

Altered Capital’s venture strategy focuses on backing exceptional founders who have already proven product, are market-fit and are looking to scale rapidly.

Pie Funds has $2.5 billion in funds under management while Altered Funds has $300 million, including investments in Crimson Education, Starboard Maritime and Oritain.

As part of the partnership, Pie Funds founder and chief investment officer Mike Taylor will join Altered Capital’s advisory committee.

What’s coming up

(Half-year results unless stated)

February 12: Skellerup

February 13: South Port

February 16: Contact Energy, a2 Milk, Freightways

February 18: Fletcher Building, Spark

February 19: Sky City Entertainment, Auckland Airport, Ventia (annual), Vital Healthcare

February 20: Vector, Winton Land

February 23: Genesis, Tourism Holdings, Chorus

February 24: Property for Industry, Mercury, PGG Wrightson, Vulcan Steel, NZME (annual)

February 25: Meridian, Ebos, Scales (annual)

February 26: Sky TV, Precinct, Heartland, Air New Zealand

February 27: Channel (annual), Summerset (annual), Port of Tauranga, Move Logistics, Vista Group (annual).

March 23: Fonterra

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.