Seek (ASX:SEK) shares shook off an early dip yesterday after the company cut guidance for the June 30 year because of a fall in job advertising.
Investors got over their early shock and Seek shares ended down 0.95% at $23.98 after sliding more than 7% in early dealings.
While they didn’t like the drop in revenue, they seem to have been comforted by the news that management has been proactive in trimming costs, which had put it closer to making earnings guidance for the 2022-23 year.
According to the update, Seek now expects to fall short of its revenue guidance for continuing operations in the year to June because of the continuing moderation of job ad volumes in Australia and NZ.
The company said that based on trading momentum for the third quarter, it expects its revenue for FY 2023 to be about $15 million lower than the guidance provided with its half-year results in February.
It is now forecasting revenue of approximately $1.245 billion for the 12 months but offsetting this company says its costs are expected to be lower than forecast and will help offset the dip in revenue.
That has allowed Seek to reaffirm its earnings EBITDA guidance for 2022-23 (excluding significant items) of around $560 million and net profit after tax of $250 million.
This implies year on year earnings growth of 10% and 1.8%, respectively.
To help sell the story, Seek revealed some longer term aspirations – it is targeting $2 billion in revenue by 2027-28, which is 60% greater than 2023’s guidance and implies a compound annual growth rate of 10% per annum.
But on Tuesday, the market’s focus was on the slight downgrade.