In sectors such as capital goods, software, and semiconductors, many corporations are expected to report results that exceed market forecasts for the fourth quarter this year.
According to DB Financial Investment on the 26th, the combined earnings expectations of domestic corporations have been adjusted downward by double digits ahead of this year's fourth-quarter earnings announcement season. The combined operating profit of corporations with three or more earnings estimates has decreased from 66.6 trillion won at the beginning of the quarter to 58.8 trillion won, a drop of 11.8%.
Among these, the number of corporations likely to post results exceeding market expectations, so-called "earning surprises," was identified as the highest in the sectors of capital goods, software, and semiconductors. Capital goods refer to items used to produce other goods, excluding land and labor.
In terms of the ratio of corporations expected to achieve earning surprises, sectors such as food and beverage, tobacco, securities, utilities, and displays were noted as having a high proportion. Conversely, it was expected that sectors such as consumer goods, materials, and hardware would see a higher ratio of corporations posting results below market expectations.
Seol Tae-hyeon, a researcher at DB Financial Investment, said that among the top corporations expected to achieve earning surprises are GS Engineering and Construction, Douzone Bizon, and Jeju Air, while those at the bottom include NCSoft, SKC, and SK IE Technology.
Seol noted that the period return of the portfolio of expected corporations that reported results exceeding market expectations in the third quarter of this year has been minus (-)4.26%, surpassing the Korea Composite Stock Price Index (KOSPI) return of -8.59% during the same period.
According to the researcher, of the 30 expected corporations, 13 actually recorded earning surprises, with Korea Aerospace Industries, KRAFTON, and Samsung Fire & Marine Insurance achieving high period returns. In contrast, the period returns of stocks expected to perform worse than market expectations were -13.81%, falling below the KOSPI index return.