KUALA LUMPUR: As the July to September earnings season picks up steam, companies in the airline, construction and property sectors are expected to deliver stronger-than-expected results, while earnings for plantation firms will likely be flattish, said analysts.

JF Apex Securities Bhd head of research Lee Chung Cheng said airline companies and small- to medium-cap property developers are likely to experience positive earnings surprises in the September quarter.

“Airline stocks such as AirAsia Bhd may benefit from the recent drop in global oil prices, which will result in lower fuel expenses,” he told The Edge Financial Daily.

According to Lee, small- to medium-cap property companies which have handed over more housing units to their buyers could outperform in this earnings season, thanks to their strong unbilled sales.

However, the earnings performance of large-cap property firms are expected to fall within expectations, he added.

Lee also sees exporters such as furniture makers, semiconductor companies and wood-based product manufacturers benefiting from the stronger US dollar.

He expects overall results of companies to be largely in line with expectations.

“Judging from the corporate earnings in the first half this year, we expect a single-digit [earnings] growth for the full year,” said Lee.

Mercury Securities Sdn Bhd head of research Edmund Tham reckoned that falling crude palm oil (CPO) prices could affect the earnings performance of plantation companies.

“I think the corporate earnings of plantation firms will remain flat in this (July to September) quarter. Unlike global oil prices, you can feel the impact [of lower CPO prices] within a few months,” he said.

Tham takes a contrarian stance on the property sector, expecting large-cap property companies to perform better this earnings season.

“There is a lot of supply in the property market and you need to have the right pricing. But with a strong brand name, larger property developers can add about 10% to 20% to their house prices,” he said.

Anbound Research Centre (Malaysia) Sdn Bhd analyst Fung Vun Ket does not expect any company or sector to outperform in the September quarter.

“The earnings performance of Malaysian companies, which still focus on the external markets, will be affected due to weaker global economy,” he said.

Fung concurred with Tham that plantation companies will underperform in the September quarter, no thanks to the lower CPO price, significant slower exports to China, as well as the weaker fresh fruit brunch output.

Fung expects companies in the aviation sector to continue to underperform, save for AirAsia, which has seen positive contribution from the Visit Malaysia Year 2014, especially its domestic and regional flights in the Asean market.

This article first appeared in The Edge Financial Daily, on November 6, 2014.