Market close: shares fall as Mainfreight guidance, Xero profit-takers emerge

New Zealand shares fell after global transport group Mainfreight said full-year earnings would miss analyst estimates and Xero snapped a stellar run, falling from a record high as some investors took profits.

The NZX 50 Index fell 6.92 points, or 0.2 percent, to 4342.50. Within the index, 23 stocks fell, 21 gained, and six were unchanged. Turnover was $165 million.

Mainfreight fell 4.7 percent to $11.20 after managing director Don Braid gave a range of $137 million to $139 million for pre-tax earnings, compared with a current market consensus for the full year of $146 million.

"It's still a great stock but this shows if you don't hit your guidance this is a market that doesn't take any prisoners on the downside," says James Smalley, client adviser at Hamilton Hindin Greene.

Xero fell 3 percent to $11.15, having soared 222 percent in the past 12 months on what chief executive Rod Drury said this week is offshore investor interest in Software as a Service companies.

"There's a bit of profit taking on Xero," Mr Smalley says. "Market cap-wise it was getting right up there so this isn't unexpected."

Fletcher Building, the biggest company on the NZX 50, rose 1.6 percent to $8.71 and fellow building products company Steel & Tube Holdings was up 1.1 percent to $2.68 after economic growth figures for the fourth quarter showed construction grew 1.8 percent, its fifth straight gain.

Telecom slid 1.3 percent to $2.22 after Labour's communications and IT spokesperson Clare Curran said the phone company is set to announce the loss of up to 1500 jobs.

Chorus, the network company spun off from Telecom in 2011, rose 0.3 percent to $2.93. Chief executive Mark Ratcliffe disclosed this week that he had acquired 84,000 shares in his own right for about $249,000.

"You like executives to have skin in the game," Mr Smalley says. "It is a pretty strong signal to the market that he thinks the stock is under-valued."

Methven, the tapware maker, fell 2.3 percent to $1.30 after long-serving chief Rick Fala announced his retirement.

Among smaller caps, Pacific Edge dropped 5.4 percent to 70 cents after long-time backer Peter Masfen sold down his holding in the biotech company.

Dorchester Pacific rose 7.1 percent to 30 cents after the company lifted its profit guidance for this year and next on a better-than-expected contribution from newly acquired EC Credit Control and better returns from finance and insurance.

(BusinessDesk)