Singapore firms surpass expectations in Q4: report

SEVERAL Singapore-listed companies have beat market forecasts with their fourth-quarter results, but are also recording weaker expectations from the street for their 2014 results.

A Morgan Stanley report released this week showed that among the 70 per cent of companies covered in the research that had reported their fourth-quarter earnings, about half had beaten analysts' expectations.

Singapore had the highest proportion of such better-than-expected performances among three Asean countries when compared with Indonesia and Thailand, the report said.

Among the companies that outdid expectations were property companies and banks.

Notably, Keppel Land booked a 7.6 per cent gain in net profit for the fourth quarter at $567 million, boosted mainly by a one-off gain from the divestment of its stake in an Indonesian project.

The street's estimate was way off - at only $95 million.

All three banks' performance in the fourth quarter also exceeded market expectations by about 18 percentage points, with DBS results representing a slightly wider margin than forecast, compared to that of its peers.

Looking at the MSCI Singapore index, which measures the performance of the large-and mid-cap segments of the Singapore market, the results of constituents that have reported their results beat the street's forecasts by about 23 percentage points. The stronger performance came on the back of better-than-expected earnings by the real-estate companies. Stripping out the results of property companies, the margin shrank to six percentage points.

But, in a sign that analysts are turning more bearish, nearly two-thirds of Singapore companies that have reported their earnings have had downgrades on their consensus earnings estimates for this year, the report said.

On the flip side, it means that the bar is set lower for companies looking to meet the street's expectations.

Morgan Stanley said: "Since the beginning of the reporting season, MSCI Singapore has witnessed 120 basis-points downward revisions to 2014 consensus estimates."

By contrast, more than half the companies in Indonesia that have reported their fourth-quarter earnings have received upward revisions to 2014 consensus earnings estimates.

Meanwhile, six in 10 Thai firms, operating in a period of political upheaval, missed analysts' estimates when reporting their earnings.

Morgan Stanley, referring to Thailand's financial sector, said: "Although financials beat consensus expectations at the net profit level, consensus has revised down 2014 earnings estimates on a weakening outlook."

More than two-thirds of Thai companies with reported fourth-quarter results have had earnings downgrades for 2014 - making it the most severe earnings downgrade for the year among the three Asean countries.