KUALA LUMPUR: Corporate earnings results for the third quarter of this year (3Q14) have been disappointing, with a large number of firms showing earnings that were below expectations.

“The earnings results for the third quarter of calendar year 2014 were disappointing and below our estimation,” said CIMB Research head Terence Wong.

Of the 117 counters covered by the bank, Wong told The Edge Financial Daily that only 13% were above expectations, while 37% came in below expectations. The remaining 51% was in line with the expectations.

Wong noted that only two sectors namely construction, and transportation and infrastructure had outperformed in 3Q.

Other sectors such as automotive, chemical products, consumer products, banking, oil and gas (O&G), tourism and leisure had underperformed.

The better earnings posted by construction, and transportation and infrastructure, were partly due to the federal government’s encouragement of these fields.

Going forward, Wong expects all sectors to exhibit similarly subdued results in 4Q, citing the negative impact on business margins as result of rising cost and slower demand.

According to MIDF Research, the percentage of companies which reported earnings below expectations jumped to 31% in 3Q from 27% in the preceding quarter. “This is the highest since the third quarter of 2013,” it said. “Conversely, the proportion of positive surprises declined to 6% during the quarter under review against 9% recorded in the second quarter. This is the lowest since the second quarter of 2013,” it said.

The remaining 63% of stocks, the firm said, had performed within expectations in 3Q. MIDF Research said semiconductor, media and O&G were the sectors recording higher total earnings in 3Q compared with both the preceding quarter and corresponding period of last year.

This article first appeared in The Edge Financial Daily, on December 2, 2014.