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The Recent Winners and Losers in The Earnings Season, And 1 Important Thing To Keep In Mind

We’re in the middle of the earnings season. With the backdrop of a rebound in the Singapore economy taking place in the fourth quarter of 2016, how are some of the companies in Singapore’s stock market doing?

In all, the results for the companies that announced their earnings appear to be mixed. The banks, such as DBS Group Holdings Ltd (SGX: D05) and Oversea-Chinese Banking Corp Limited (SGX: O39), both announced lower profit for the fourth quarter. On the other hand, agri-business giant Wilmar International Limited (SGX: F34) saw a huge improvement in its bottom-line.

Let’s take a look at some of the winners and losers amongst the companies that have recently announced their earnings

The winners

Food & beverage retailer BreadTalk Group Limited (SGX: 5DA), hotel owner and property developer Amara Holdings Limited (SGX: A34), and confectionaries maker Delfi Ltd (SGX: P34) have all produced stronger results in the latest quarter.

Meanwhile, land transport services provider ComfortDelGro Corporation Ltd (SGX: C52) ended the fourth quarter of 2016 with a 4.4% increase in net profit. This was achieved despite  lower revenue and a more competitive landscape for its taxi business.

Then, there’s Singapore Technologies Engineering Ltd (SGX: S63), which saw its net profit grow by 21% year-on-year in the last quarter of 2016 despite its revenue improving by ‘just’ 2%. Lastly, waste management company 800 Super Holdings Ltd (SGX: 5TG) saw an amazing 111% jump in its latest quarterly earnings due to better cost management.

The losers

The telecommunications industry had a pretty troubled quarter. StarHub Ltd (SGX: CC3) saw a much weaker profit performance in the fourth quarter of 2016 (a 33% decline) and in the whole year (an 8.3% decline). This led to the company’s decision to forecast its 2017 dividend at level that’s 20% below what it paid out in 2016.

Following in a similar path as StarHub is M1 Ltd (SGX: B2F); the company’s profit for the fourth quarter of 2016 had dropped by 27% and its dividend for the year also declined.

For an industry that is well-known for having companies that offers strong and stable dividend yields, the lowered dividends for M1 and StarHub is clearly a big thing for investors.

The oil and gas sector is also one that is struggling at the moment. Keppel Corporation Limited (SGX: BN4) saw double-digit declines in its revenue, operating profit, and net profit, for both 2016 and the fourth quarter of the year.

Even as the broader economy in Singapore is showing some signs of recovery in growth, not every company in Singapore is doing well. This is an important point investors need to understand that before jumping into buying stocks just because the country on the whole is seeing some positive economic data.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim owns shares in Keppel Corporation.