Chart of the Day: Here's proof that consumer firms' revenue momentum is tempering down

Downward earnings revision seen.

According to DBS, based on its current expectations, it believes corporate earnings for consumer stocks have entered into a more challenging environment.

Here's more:

In 2012, stocks in our Singapore consumer universe registered strong revenue and net profit growth of 12% and 9% respectively, driven by rising income and subdued inflation regionally.

Operating margins also expanded, benefitting from favourable input prices. By contrast, 2013 earnings growth is now likely to slow due to challenges in consumption demand regionally and slight upward pressure in input prices.

Impact of weak demand, lower margins seen; downward earnings revision seen.

Results for the quarter ended September were lacklustre. Earnings that were reported for the quarter ending September 2013 generally lagged expectations.

Impact of weak consumption demand and lower margins were general trends being observed. Post-results, we have slashed our FY13F profit growth expectations down by 14ppts to a mere 4% growth and have moderated our growth expectations for FY14F by -5ppts to 9%.

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