By LYDIA NATHAN / Pic By MUHD AMIN NAHARUL
Some 29% of corporate results for the first quarter of calendar year 2018 (1Q18) came in below expectations, with property, construction and tobacco sectors leading the way, compared to 19% that were reported in the previous quarter.
According to MIDF Research (MIDFR), the percentage of companies which registered earnings below expectations increased to a six-quarter high since 3Q16.
The research also showed the percentage of positive surprises decreased by half to a three-quarter low of 8% from 16% in the previous quarter.
“Cumulatively, the reported earnings of companies under MIDFR Universe totalled RM17.29 billion in 1Q18,” the MIDF’s report stated.
The aggregate reported earnings of FTSE Bursa Malaysia KLCI’s 30 constituents totalled RM16.51 billion for the 1Q18, positive for both sequentially at 6.6% quarter-on-quarter and 8.1% year-on-year (YoY).
The property sector showed negative sequential and YoY earnings due to the adoption of Malaysian Financial Reporting Standard 15 which resulted in deferred revenue recognition of international projects.
However, new property sales in the 1Q18 were largely seen on track vis-à-vis expectations which should indicate a lower risk of earnings miss in the near term.
The tobacco sector had its earnings hit by a high volume of illicit cigarettes being sold in the market, with the illegal market share reaching an all high of 63%.