Corporates look weak

THE corporate results season last month was one of the weakest in more than two decades relative to market expectations, Goldman Sachs says.

Higher energy costs and rising competition were among factors weighing on companies in many sectors, the investment bank says.

“Good news was hard to find, with the vast majority of names that performed well rallying simply because the market was too bearish into results in our view,” said Goldman Sachs strategist Matt Ross.

“On the other hand, the list of names that de-rated significantly on the back of large earnings downgrades was long.”

Mr Ross noted while revenue showed some improvement, many companies saw emerging headwinds.

“Firms are facing rising wages, higher input costs – power in particular – and rising competition,” he said.