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  • Writer's pictureBy The Financial District

COL Study: Corporate Earnings Weak In Q2

The earnings growth rate of publicly-listed companies slowed down in the second quarter of 2023 compared to the first three months of the year due to rising inflation and interest rates, while the low base effect of the first quarter of 2022 faded.


Headline earnings of listed companies during the first half of 2023 increased by a median rate of 8.8 percent, slower than the 28.2 percent median growth registered during the first quarter.



In a study, COL Financial reported that "headline earnings of listed companies during the first half of 2023 increased by a median rate of 8.8 percent, slower than the 28.2 percent median growth registered during the first quarter."


It noted, "Recall that the economy was much weaker during the first quarter of 2022 as the Philippines was locked down to control the spread of the COVID-19 Omicron variant."



COL Financial added "Meanwhile, the inflation rate increased to an average of 7.2% during the first half of 2023. This prompted the BSP to raise rates by another 75 basis points to 6.25 percent to control price increases."


On the positive side, COL Financial pointed out that numerous companies continued to outperform expectations at 35.2%, with 31.5% performing in line with expectations and 33.3% performing below expectations.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

However, the percentage of companies outperforming was much lower than the 44.4% registered during the first quarter, it observed, as it pointed out that "Power, property companies, and banks were the major earnings growth drivers during the second quarter earnings season. Most outperformers also belonged to these sectors."


Power companies delivered median earnings growth of 36.3%, it noted, pointing out that during the first half, excluding one-offs, growth was still strong at 22%.




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