Earnings Season Has Been Good to DM Asia’s Large Caps

May 04, 2023
By Knowledge Leaders Team in Markets, News

Developed Asia’s large cap stocks have had a generally positive earnings season so far. Earnings per share from companies that have already reported have averaged a surprise to the upside of almost 12% on an equal-weighted basis, with 28 of the 47 equities in our DM Asia large cap basket reporting a positive EPS surprise. Revenues have been a bit more modest, though still averaging a 1.6% positive surprise, with 29 of 47 companies coming in above their sales expectations.

Shown below are report date, earnings per share, and sales metrics for our DM Asia large cap basket of stocks.

Methodologically, we cap surprise percentage at 100% and -100% to minimize the effect of extreme outliers on aggregated statistics. We also trim out companies with incompletely reported data.

The consumer discretionary sector subset of this basket tracked less of a positive EPS surprise, though sales came in above expectations by more than double the basket average. Five of six in the consumer discretionary subset beat sales expectations.

DM Asia large cap consumer discretionary companies, EPS and sales metrics:

Industrials are leading the charge in earnings generation so far this season, reporting a more than 26% EPS beat on average. Sales beats also came in above the average, delivering a strong 2.4% positive surprise on an equal-weighted basis.

DM Asia large cap industrials, EPS and sales metrics:

Information technology companies have delivered results that are just about in line with expectations this earnings season, reporting an average EPS surprise of only 2.1%, well below the basket average. Sales too, have been relatively modest, coming in more or less at expected levels, just above the basket average at 1.9%.

DM Asia large cap information technology companies, EPS and sales metrics:

As of 3/31/23, Lasertec, Fujitsu, Nomura Research, OMRON, OBIC, Toyota Industries, DENSO, M3, and Daiichi Sankyo were held in the Knowledge Leaders Strategy.

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