Analysts distressed over dismal corporate earnings as results season draws to a close

The worst isn't over yet.

The slew of quarterly reports that Singapore companies churned out in the past few weeks did not paint a pretty picture for brokers in the city-state.

Analysts watched in horror as most companies failed to meet profit expectations. Overcapacity, forex volatility and margin pressures dented bottom lines during the quarter, and brokers fear that there is worse to come for listed firms.

"It was the usual culprits that were the key drags - oil and gas, plantation and shipping sectors," DBS Vickers said in a report.

Companies in DBS' portfolio unveiled a 10% y-o-y drop and 21% q-o-q fall in earnings. The worst performers for DBS included Neptune Orient Lines, Sembcorp Marine, Vard, OCBC, and OSIM.

"There is still no respite from the cut in earnings which we have seen for the past one year," DBS said.

Meanwhile, analysts at CIMB found that there was a record four earnings misses for every beat in Q3.

CIMB warned that in coming quarters, banks will grapple with more bad loans, while the worst is yet to come for office and hotel rents. Consumer stocks will trip on weak demand and collapsing ASEAN currencies, while transport players will see an acute margin squeeze and lower utilization of vessels.

“In light of the deterioration in corporate earnings, we certainly believe that the right move for portfolios must be to be cashed-up. We are overweight banks and property, as we see more earnings resilience and valuation resilience, in these sectors,” CIMB noted.