By James Atkinson
Treasury Wine Estates (TWE) is widely expected to announce another profit downgrade after calling a trading halt yesterday.
The company is believed to have had a strong December in Australia and the trading halt is understood to relate to problems abroad.
It is likely linked to a poor profit performance in the lead-up to Christmas firstly in the US market as well as China, where its sales have been constrained by government austerity measures, as previously reported by TheShout.
However, the trading halt is puzzling because failure to hit an earnings forecast would not normally be reason enough for a trading halt, which would typically be reserved for a more serious, long-term issue such as the US inventory impairment announced last year.
This is especially so given that there is plenty of time remaining in the 2013-14 fiscal year for the company to recover from any earnings slip-up in the first half, after having given itself plenty of latitude in the earnings forecast of October last year.
At that time, interim chief executive Warwick Every-Burns provided an EBITS range of between $230 million and $250 million, allowing room to move from guidance that was likely somewhere in between these figures.
Further information will be provided as soon as it comes to hand.