Analysts say shareholders in Australian listed companies could suffer a 28% cut in dividends from a likely 17% slump in earnings for 2009.
But 2010 could deliver better returns than the market has priced in, peppered with a raft of takeovers as stronger companies are pressured into working balance sheets harder, EL & C Baillieu's research director Ivor Ries said.
Two weeks out from Australia's company reporting season, the consensus view is that earnings will be between 16% and 18% lower, he told ABC Television on Sunday.
"But they're expecting a more severe cut in dividends - they're expecting dividends to be down 26% to 28%," he said.
Few, if any, company surprises are expected as a deluge of earnings reports hits the Australian stock exchange over the next six weeks, with much greater communication between companies, analysts and major investors having taken place over the last six months.
And outlook statements of any substance will be rare, Mr Ries said.
Platypus Asset Management's chief investment officer Donald Williams agrees and says the earnings outlook is grim.
"You can hardly find an industrial company in Australia that's upbeat about the next six months, so everyone is still cautious."
