No-one has been immune to the global credit crunch, from households and small private businesses through to the largest listed banks and companies in the world - and their investors.
The full-year reporting season of the New Zealand and Australian stock exchanges gets under way during the next five weeks for listed companies, whose every utterance will be under scrutiny by investors and market analysts.
ABN Amro Craigs broker Peter McIntyre said the market did not have high expectations, and financial results were expected to be "in line with expectations".
However, he warned the financial results would be "poor" compared with a year ago, earnings per share during 2009 could be down 20% to 25%, and "dividend cuts and asset writedowns are looming".
"This reporting season looms as one of the most critical in recent history," he said.
Forsyth Barr broker Tony Conroy said the financial results were "expected to be grim" and while ending almost two years of financial downgrades, companies' future "outlooks would be subdued".
He predicted the median of company earnings before interest, tax, depreciation and amortisation for the overall market to be down about 7% for the 12-month period, and about 13% during the past six months compared with a year ago.
The median of reported profit for the 12 months would be down 33%, versus 27% for the six-month period, and earnings per share down 23% for 12 months, versus 20% for the six-month period.
"At this stage, we don't expect to get a great picture of the outlook from the companies, but we will be expecting to get a clearer picture come the annual general meeting season towards November.
"Then, we may be able to confirm that we are at a turning point," Mr Conroy said.
Analysis of top stocks, such as Fletcher Building, Telecom, Auckland International Airport, Sky TV, Mainfreight and Freightways revealed a broad spectrum of problems faced by the variety of sectors, as opposed to pre-recession times of growth, acquisition and dividends aplenty.
After the fallout from the US subprime lending fiasco stung banks, their lenders and investors went into panic mode and the banks' own risk-aversion then held the world to ransom as credit was withheld.
All this has further compounded the nearly 18-month-old global recession and rising unemployment.
Mr McIntyre said that after the long downward cycle in the equities market, the New Zealand companies were expected to report broadly in line with guidance, or better than thought, giving both earnings surprises and disappointments.
"We believe the real story from the reporting season will be management outlook comments and 2010 earnings guidance," he said.
"The overall patterns for sectors are quite mixed this time. Some growth companies have done OK during the recession, like Delegats and Abano," he said.
However, at the other end of the spectrum, the harder-hit areas have been the cyclical stocks such as building, retail and tourism; while in the middle were the defensive sectors, which have survived.
Mr McIntyre said Fletcher Building, which normally outperforms market expectations, is expected to have its earnings fall further in 2010 because of the speed in the deterioration in market conditions; a "key" investor consideration being its usually reliable dividend payout.
"However, leading indicators suggest market conditions are improving. Fletcher earnings are picked to be recovering during 2011."
The indicators suggested the key New Zealand residential construction market was likely to have bottomed out, there was considerable stimulus from historically low mortgage rates, and strong net-migration flows would begin to drive a recovery.
"Recent increases in existing home sales, section sales and housing-loan approvals are all indicative of a market at a turning point," Mr McIntyre said.
Mr Conroy said Fletcher's reported profit, before any abnormals, was expected to be down about 36% on the previous year.
"It's difficult to see a reversal in earnings in the short term. They have initiated costs savings, but their fixed costs remain high, causing margins to fall sharply during 2009, and we expect that to continue in 2010," he said.
Mr Conroy was expecting Telecom to report in line with guidance and so deliver few surprises to investors.
"We're expecting little sales growth and the reported profit before any pre-abnormals to be down around 32% for the 12 months," he said.
Much of the market and investor interest will focus on uptake of the new XT mobile network, he said.
Mr McIntyre was looking for Telecom to firm up financial guidance for 2010, give an insight into bridging the 2011 "value gap" between management and market expectations, and give more information on capital management.
"We believe the market is likely to want tangible evidence around certain key drivers of the earnings recovery - mobile and costs in particular - before a substantial re-rating can occur," Mr McIntyre said.
The Warehouse was expecting virtually flat sales and maybe a small rise in earnings-per-share growth, but to provide a result that should be in line with guidance, Mr Conroy said.
However, Briscoes should be much improved, with an expectation of a 60% gain in earnings per share and a 100% gain in reported profit, an improvement supported by Rebel Sport returning to profit.
He said what happened overseas would give New Zealand a lead, and of most interest to New Zealand investors would be the health of the United States housing market and its financial system, which caused the subprime crisis and would determine the rate of recovery.
"So far, a lot of profitability in the US has come out of cost-cutting; layoffs and restructuring. That will only have a short-term effect. In the long term, it will come down to [US] consumer demand," Mr McIntyre said.
Similarly, the important basics to be considered in New Zealand will be domestic demand for goods, the housing-market recovery and the extent and effects of rising unemployment. Access to capital has been a nightmare for many large-cap companies, as banks' risk-aversion has pushed borrowing rates beyond prudent levels.
Slumping share prices meant existing debt levels became larger in percentage terms, and many companies began breaching banking covenants.
During the year in New Zealand, 23 companies went back to the marketplace, raising more than $4 billion in bonds and rights issues to avoid breaking banking covenants and underpin balance sheets for the year ahead.
Mr McIntyre said: "Given the precious nature of capital in the current environment, dividends will come under pressure.
"Companies will want as much cash as possible on the balance sheets."
In the property sector, one of the least represented in capital raisings so far this year, Mr McIntyre said access to bank funding was unlikely to improve quickly and the banking covenants were likely to be tightened and remain that way.
"We see some further risks of capital raisings across the property sector," he said.
Overall in the markets, the difficult business environment and generally falling asset values globally would see many balance sheets subject to impairment testing and asset writedowns, he said.
Mr Conroy said it was likely even companies that had been trading well, such as Abano and Sky City, were still going to be cautious in their outlook, but they should at least show some improvement.
• Key company reporting dates -
August
12 - Fletcher Building.
13 - NZ Farming Systems, Steel & Tube.
14 - Contact Energy.
17 - Freightways.
18 - PGG Wrightson.
20 - Mainfreight.
21 - Telecom, Sky Network Television.
25 - Michael Hill.
26 - NZ Oil & Gas, SkyCity, Tourism Holdings.
27 - Air New Zealand.
28 - Auckland International Airport, Pike River Coal.
September
9 - Briscoes.
11 - The Warehouse.
23 - Hallenstein Glasson, Pumpkin Patch.
