More beats, fewer misses: ASX reporting season is off to a promising start

Everyone knows the lesson of the Tortoise and the Hare is that slow and steady wins the race, but that doesn't mean there's any harm in getting off to a quick start. 

That has certainly been the case for the ASX after the first week of reporting season. Like the hare, ASX stocks seem to have come out of the traps with a point to prove. 

According to analysis by FNArena's Rudi Filapek-Vandyck, week one of August's reporting season saw 39.1% of companies post result beats, with 34.8% in-line and only 26.1% posting misses.

That compares favourably with both the first week of February reporting season, in which only 27.3% of companies posted beats, with another 27.3% in-line and 45.5% posting misses.

It also compares favourably with February reporting season as a whole, where across 380 companies, 33.9% managed beats, 34.2% were in-line, and 31.8% posted misses.

Of course, it's still very early doors, but given the general sentiment going into reporting season was one of caution, it's a promising start. 

And this is despite Australian companies having to contend with the ongoing Iran War, inflation, an uncertain economic picture domestically and the threat of AI. Short sellers have also been on the move, with short interest on the ASX up 34% since last reporting season.

Despite all that, the ASX 200 has shown there's still life in it yet and has surged to a new record high, even if the dislocation that has characterised the bourse remains apparent. 

As Filapek-Vandyck has said, it's felt like the majority of the ASX has been in a bear market, with the average ASX stock down 4.5% in the first half of 2026. The index has been saved by heavyweight bank and resources stocks that account for all of its expected EPS growth.

Even that could be about to change. 

According to Filapek-Vandyck, "the sectors that are carrying this year's profit are not the same as next year. So there is a flip coming if market expectations are correct."

And Market Partners' James Gerrish says the two sectors holding up the index - banks and resources - could even drive the ASX higher at a time when other stock markets have faltered. 

"If those two areas actually hold up better than the market's positioned for, the Aussie market could continue to outperform the US, which has done in very recent times."

Of course, as the hare found out, what matters is how you finish. This isn't the time to be resting on laurels or taking an early victory lap. 

A lot can change, and change quickly, in this momentum-driven market, but it's still worth taking a minute to recognise when things are going well.