Time to deliver or face the music The time for companies to open their books for the inquisitive eyes of investors is approaching, and with a number of earnings downgrades and upgrades, knowing when to hold and when to fold becomes increasingly important. In recent weeks, all eyes have been on the retail sector. Many businesses had touted strong Christmas and sale period traffic, but the numbers beginning to come in tell a different story. Super Retail Group and The Reject Shop have, in consecutive weeks, disappointed investors. After announcing disappointing sales numbers, investors punished the retailers, hitting shares by 14 per cent and 32 per cent respectively. The news isn't all doom and gloom, with JB Hi-Fi, fearing that its own share price would suffer from the poor performance of other retailers, reporting on Tuesday it expects profits to rise 10 per cent for the December half. Shares jumped as much as 11 per cent. We've had a couple of companies that have travelled reasonably well through this tough retail environment getting whacked this Christmas. Super Retail Group is the best example of that, where they've grown really consistently right through this post-GFC period and they obviously fell a bit short," Platypus Asset Management chief investment officer Donald Williams said. Building materials group Boral on Tuesday gave strong guidance of a $90 million half-year profit, well ahead of analyst expectations of $75 million, as favourable weather conditions and a recovering housing market helped boost sales. However, Boral did warn of a skewing of earnings into the first half. "We think the economy is improving, with things like a lower currency; we think the consumer will be in a better place in six months time, but it's a pretty slow recovery," Mr Williams said. Production reports from Australia's major miners have offered a glimpse into potential upside surprises in the sector and a strong iron ore price in the second half is likely to have helped most producers. A falling iron ore price has had some investors worried, but demand from China is likely to stay strong and will hold the price well above production costs even for smaller producers. Stocks that have outperformed the market in the last year have been largely driven by price-to-earnings expansion, with the expectation that growth will come. ""Delivery of earnings will be critical to maintain and support future market returns,"" said Macquarie analysts. ""Splitting the ASX200 universe, the P/E expansion has mainly occurred in the industrial sector, while returns in the resource sector were less compelling,"" Macquarie analysts said. ""Recent quarterly production updates highlight a positive outlook for some resource stocks this reporting season."" Among miners, BC Iron, Fortescue Metals and Rio Tinto had the largest chance of an upside earnings surprise, Macquarie said. Major miners have quickly shifted gears between investing in expansion and exploration to much tighter fiscal management and consolidation. Poor earnings for gold miners in the first half of this financial year shouldn't come as a surprise, said BBY private client advisor Henry Jennings. 2013 saw the end of gold's massive bull run, with the metal's first yearly loss since 2000. Should the gold price continue to soften, it will become uneconomical for many producers to continue to stay in business. It's going to be pretty Darwinian in the gold sector. The strong guys will survive," Mr Jennings said. We've had a massive bull market in gold over the last five years and with any massive bull market it does encourage late-comers and the inefficient and the dodgy to embark on projects that shouldn't, wouldn't and really can't get up under most circumstances.