Special Report: Corporate Earnings Analysis of 50 PSE Companies

PinoyInvestor’s Special Reports cover our partner brokers’ expert analysis on a range of topics affecting the stock market. These may include economic updates, sector analyses, upcoming IPOs, and more! Learn how you can use this report in the PinoyInvestor guide.

 

NOTE: Below you’ll find a Premium Special Report — prepared by our stock brokerage partner RCBC Securities — and we’re giving it to you for FREE! Want your own unlimited Premium Access account? Use the coupon code PSE8500 when you sign up for 1-Year Premium Access to get PHP 599.00 price discount. Offer lasts only until this Friday, October 27!

Upgrade this week and get full access to these five (5) awesome Premium Special Reports!

1. Which Telco Stock to Buy — Globe Telecom (GLO) or PLDT (TEL)?

2. Forecast Earnings Upgrades and Downgrades & Outlook on 50 PSE Companies

3. Property companies affected by the Philippines’ Tax Reform and Trump’s “America First” policy

4. 17 Companies that may Benefit from the Philippines’ Warming Relationship with China

5. Top 10 Stock Picks and PSE Outlook for Oct-Dec 2017 (by RCBC Securities)

 

Why Analyzing Corporate Earnings is Important

How can corporate earnings performance help you decide which stocks to buy, sell, or hold?

You may not know it but stock analysts use historical performance to forecast a company’s future earnings. If the company performed below expectations, financial assumptions may be adjusted which could lead to a lower Target Price.

If a company performed above expectations, brokers may adjust upwards the forecasted earnings which could increase the Target Price of a stock and upgrade its recommendation from a Hold or Sell to a BUY.

So regularly check a company’s earnings and read our partner broker’s analysis if the company’s future earnings will be adjusted upwards or downwards. Access other Special Reports to see whether the stock’s Target Price has been retained, reduced, or adjusted upwards.

 

Corporate Earnings Analysis

Aggregate corporate earnings up only 7%, but catch-up in the 2nd Half of 2017 expected

The 1st Half, that is from January to June, of 2017 aggregate core net income of 49 PSE companies analyzed by RCBC Securities increased by 7%. While, at first glance, this result looks short of the full-year 2017 forecast of 10% growth, it is actually in-line.

The full report from RCBC Securities:

“Twenty-seven (27) companies delivered in-line earnings, while 10 companies exceeded our forecasts, and 12 disappointed.

The Property and Power & Energy companies performed consistent with, if not better than, expectations. In contrast, the Consumer and Construction-related sectors disappointed.

Of 9 companies under the Consumer sector, 6 companies actually turned in on-track to better results. However, Universal Robina Corp. (URC) reported a 15% earnings contraction vs. our expectation of an 8% growth, dragging the whole Consumer sector down.

The Construction-related sector also eroded the overall results, as the two cement companies that we cover (CHP and EAGLE) fell short profit-wise, as imports weighed down on cement prices and, consequently, margins, more than we had expected.

Other companies which pulled down aggregate earnings were Bank of the Philippine Islands (BPI), Philippine National Bank (PNB), and 8990 Holdings (HOUSE). However, we expect these companies to catch up in the 2nd Half (2H) of the year to meet our full-year earnings forecasts.

BPI’s 1H net income fell 8% primarily because of a high base effect, as 1H 2016 net income was bloated by a PHP 5.56 billion trading gain. There will be no such effect in the 2H. In fact, the bank booked PHP 158 million in trading losses in the 2H 2016 and, hence, 2H 2017 net income and, for that matter, full year, will likely be higher year-on-year (yoy).

PNB had a similar high base effect resulting, on the other hand, from around PHP 1.6 billion in gain on disposal of foreclosed assets in the 1H 2016 that wasn’t matched this year. With no such gains in the 2H 2016, the 2H 2017 net income will manage a yoy growth.

As for 8990 Holdings (HOUSE), the property firm reported lower yoy earnings in the 1st Half due to delays in project completion. However, we expect the company to be able to bring its completion backlog up-to-date in the 2H.”

 

Summary of Earnings Analysis

Here’s a list of companies whose Net Income was In-Line, Above, or Below the estimates of RCBC Securities.

Again, stock analysts use historical performance to forecast a company’s future earnings. If the company performed below expectations, financial assumptions may be adjusted which could lead to a lower Target Price.

If a company performed above expectations, brokers may adjust upwards the forecasted earnings which could increase the Target Price of a stock and upgrade its recommendation from a Hold or Sell to a BUY.

Access other Special Reports below to see whether the stock’s Target Price has been retained, reduced, or adjusted upwards.

 

NOTE: We’re giving you an instant PHP 599.00 discount if you sign up for 1-Year Premium Access using the coupon code PSE8500. Discount code only available until this Friday, October 27!

Upgrade this week and get full access to these five (5) awesome Premium Special Reports!

1. Which Telco Stock to Buy — Globe Telecom (GLO) or PLDT (TEL)?

2. Forecast Earnings Upgrades and Downgrades & Outlook on 50 PSE Companies

3. Property companies affected by the Philippines’ Tax Reform and Trump’s “America First” policy

4. 17 Companies that may Benefit from the Philippines’ Warming Relationship with China

5. Top 10 Stock Picks and PSE Outlook for Oct-Dec 2017 (by RCBC Securities)

 

This report is prepared by PinoyInvestor’s partner broker below. Sign up to this stock broker to avail of their complete trading brokerage services:

RCBC Securities
RCBC Securities

RCBC Securities is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.