Wesfarmers (ASX:WES) is Australia’s leading conglomerate, and one of the most widely know blue chip stocks in the Australian share market.

Since listing on the ASX in 1984, the company has recorded strong growth in assets and profits.

The company owns several iconic Australian businesses, including supermarket chain Coles, hardware retailer Bunning’s Warehouse, discount department stores Target and K-Mart, and office supplies provider Officeworks. WES also involves in industrials supplies distribution, coal mining, fertilisers, chemicals and general insurance.

Today, WES reported its full year results.

FY11 net profit climbs 22.8% to $1.92 billion, exceeding analyst estimates of a $1.88 billion profit.  A final dividend of $1.50 was declared, also beating estimates.

Coles earnings growth outpaced sales growth, reflecting operational efficiencies at the division.  Kmart and Bunnings also recorded earnings growth.

However, Target EBIT slumped 26.5% due primarily to price deflation and clearance activity.

Revenue at the Coal division grew 25.6% on-year, with record export prices and strong demand offsetting the impact to production from the early-year flooding.

WES was optimistic about the outlook given solid operating fundamentals, but said its outlook was subject to any adverse shocks from the fragile global economy.

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Commonwealth Bank (ASX:CBA) is the nation’s largest bank by market capitalisation, holds the greatest amount of deposits, the most home loans, and also controls a fair chunk of the wealth management market with its Colonial First State behemoth.

It is the second biggest company in the Australian share market, and is widely considered a blue chip stock among investors.

Today, CBA reported a FY11 cash profit of $6.84 billion, up 12% from the prior year.  The profit growth helped return on equity improve to 19.5%.

The result slightly topped analyst estimates of a $6.82 billion profit, whilst its final dividend of $1.88 also came in ahead of expectations.

Net interest margin of 2.19% was up from 2.13% in the FY10, with the group improving its funding mix.

CBA warned that credit growth was likely to remain slow over the next few months and that funding costs could rise due to the recent market turmoil.

The bleak outlook didn’t have a negative impact on CBA shares, which have opened solidly higher.

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Newcrest Mining (ASX:NCM) is Australia’s largest gold producer, with mining and exploration projects in Australia, Papua New Guinea (PNG), Indonesia and the US. The miner also has a smaller exposure to copper, mostly as a by-product of its gold production.

Importantly, NCM is working on bringing a few massive projects on stream. It already has six operating mines and five significant development projects.

NCM achieved its first gold production at its Hidden Valley gold mine in PNG, and delivered initial production ore at Ridgeway Deeps, a resource below its Ridgeway mine in central New South Wales.

In contrast to most miners, NCM mostly focuses on exploration-led production increases rather than acquisitions.

However, NCM reversed this trend when it decided to takeover Lihir Gold (LGL).

Newcrest Mining this week downgraded its production guidance for FY11 as a result of a production interruption at its Lihir mine and minor production delays at other sites.

Australia’s biggest gold miner is now expecting to produce 2.7 million ounces of gold this year, down approximately 3.5% from its previous guidance of 2.75 – 2.85 million ounces.

NCM should continue to receive support from surging gold prices.

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Westpac Bank (WBC) is Australia’s oldest bank, operating a significant banking franchise with balance exposures to retail, corporate and institutional sectors.

Following its merger with St George Bank, WBC is not too far behind Commonwealth Bank in the battle to be the biggest in Australia. WBC is also among the market’s leading blue chip stocks.

WBC recently received final approval to open its second branch in China.

The new branch, which will be located in Beijing, follows the 2008 opening of WBC’s first branch in Shanghai.

The group has plans to open a further two branches in China.

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News Corp (NWS) is a diversified media conglomerate with interests all over the world and in most facets of media.

NWS thus has a wide range of household name services and assets under its belt, including Fox Filmed Entertainment, Twentieth Century Fox Television, Fox Sports, book publisher Harper Collins, the New York Post in the US, web services Photobucket and MySpace, and Dow Jones.

The group is also considered a blue chip stock among global investors and is one of the biggest companies in the Australian share market.

Last week, NWS advised that third quarter net profit fell 24% from a year earlier to $639 million.  The profit result missed analyst estimates.

The result came on the back of a 6% decrease in revenue, which NWSattributed to weakness in its filmed entertainment and publishing divisions.

However, the cable division was a bright spot, with operating earnings rising 25% on-year amid stronger advertising revenue.

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Macquarie Group (MQG) is Australia’s largest and leading investment bank and is considered among the market’s blue chip stocks.

MQG has evolved over time into a complex portfolio of businesses which include banking, investment banking, asset management and private equity.

On 29 April, MQG reported a 9% fall in FY11 net profit to $956 million, slightly ahead of its previous guidance of a $947 million profit.

MQG blamed the poor result on subdued equity market activity and higher costs.  Earnings did recover in the 2H11 though, with profit rising 37% from the 1H11.

The group also declared a final dividend of $1.00 per share (unfranked), which was ahead of analyst estimates of an 87.6 cent dividend.

Macquarie Group said it was more optimistic about the FY12, although the outlook was dependant on market conditions and the performance of its investment banking division.

Nevertheless, it will be one of the stocks to watch if market conditions ultimately do improve.

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Wesfarmers (WES) is Australia’s leading conglomerate, headquartered in Perth, Western Australia.

Since listing on the ASX in 1984, the company has recorded strong growth in assets and profits.

Wesfarmers owns several iconic Australian businesses, including supermarket chain Coles, hardware retailer Bunning’s Warehouse, discount department stores Target and K-Mart, and office supplies provider Officeworks. WES also involves in industrials supplies distribution, coal mining, fertilisers, chemicals and general insurance.

WES is also one of the market’s blue chip stocks and has been considered among the shares to buy for a number of years.

WES reported its third quarter retails sales results today, with the results coming in above market expectations.

Standout supermarkets

The Coles business was the standout performer, with its Food and Liquor division sales growing by 7.1% and Convenience division sales increasing by 12.1%. These numbers beats its long term rival Woolworths (WOW) which only achieved 4.6% growth in its Australian Food and Liquor division.

We believe Coles has been stealing market share from Woolworths over the past few months, on the back of its aggressive expansion and discounting strategy.

Bunnings also delivered impressive results. The home improvement businesses grew its sales by 8.1%, also beating consensus estimates on the back of enhancements made to its customer offering and solid sales contribution from newly-opened stores.

Officeworks also delivered positive growth despite challenging operating conditions and subdued spending from small businesses. The office supplies division achieved 3.5% growth.

Target sales declined by 0.1%, due to the continued price deflation in general products, and lower volume of sales in electrical products. Target did manage to somewhat offset this by solid growth in apparel and homeware products.

Kmart sales slightly disappointed, with revenue falling by 2.5% due to price cuts. The lower prices has helped Kmart to increase its overall sales volume and may help them to grow its market share, which we believe will benefit the business over the longer term.

Shares not on sale

WES is trading at 16.5 times FY11 earnings, which looks fairly valued at current price levels.

If Coles continues to turn around and coal price remain solid, we do some further upside to WES’s valuation.

WES could also unlock significant value if it can spin off some of its non-core business, with some analysts finally losing patience with the company’s trademark diverse earnings base. Some investors have argued that WES has grown too big and has lost some operating efficiency due to the distinctive nature of businesses they currently own.

If WES spins off its fertiliser or general insurance businesses or its coal assets, it may help to unlock hidden value for WES shareholders. If these businesses were trading as standalone entities, they would undoubtedly attract greater takeover interest from domestic and international corporations.

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Newcrest Mining (ASX:NCM) is Australia’s largest gold producer, with mining and exploration projects in Australia, Papua New Guinea (PNG), Indonesia and the US. The miner also has a smaller exposure to copper, mostly as a by-product of its gold production.

The company is also considered among the market’s blue chip stocks by virtue of its size and performance.  Furthermore, due to its leverage to rising gold prices, NCM has been one of the hot stocks over the past month.

NCM reported its latest quarterly production numbers yesterday.  The results showed a 16% decline in gold output from the previous quarter.

Gold output was hit by wet weather events in eastern Australia, low rainfall which hurt production at Lihir, and civil unrest in the Ivory Coast leading to the suspension of operations at Bonriko.

As a result, NCM said cash costs for the quarter rose from $440 to $497 per ounce.  Newcrest Mining also downgraded full year gold production guidance to 2.82 million ounces (plus or minus 35,000 ounces).

This compares to previous guidance of between 2.85 million and 2.95 million ounces.

Copper production guidance was left unchanged at 75,000 – 80,000 tonnes, with cash cost guidance also remaining the same.

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QBE Ltd (ASX:QBE) is a leading provider of general insurance and reinsurance services in Australia, the Pacific, Asia, the Americas and Europe.

The company is Australia’s largest insurer, and one of the top 25 insurers worldwide.

In yesterday’s annual general meeting, QBE said that it expects an FY11 insurance profit margin of 15% – 18%.

The group also anticipates a 30% growth in before-tax insurance profit, saying that it was confident about the medium and long-term outlook.

This compares to previous guidance of 22% – 25% insurance profit growth.

QBE based its more optimistic profit forecast on higher premium income from its recent acquisitions, which will offset the impact of the recent increase in catastrophe claims.

QBE noted that it will be on the hunt for further acquisitions in 2011.

QBE shares soared 5.5% on the day, making it one of the best performing blue chip shares in the Australian share market.

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Origin Energy (ORG) is a leading Australasian integrated energy company, participating in most segments of the energy supply chain, including natural gas and oil exploration and production, electricity generation, and energy retailing.

The company is also considered among the blue chip stocks in the Australian share market.

On 15 November, ORG announced a $2.3 billion capital raising to help pay for December’s purchase of NSW’s electricity assets.

The raising also means that ORG has reinstituted its FY11 guidance to underlying profit growth of around 15%.

The higher earnings forecast reflects an expected lower interest expense due to the paying down of debt associated with the asset purchase.

The new issue will be through an entitlement offer at $13, representing a 17% discount to ORG’s last price of $15.66.

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