Earnings Miss: CSC Steel Holdings Berhad Missed EPS By 9.5% And Analysts Are Revising Their Forecasts

Investors in CSC Steel Holdings Berhad (KLSE:CSCSTEL) had a good week, as its shares rose 5.6% to close at RM1.31 following the release of its yearly results. It looks like the results were a bit of a negative overall. While revenues of RM1.6b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.5% to hit RM0.13 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

View our latest analysis for CSC Steel Holdings Berhad

Following last week's earnings report, CSC Steel Holdings Berhad's sole analyst are forecasting 2024 revenues to be RM1.56b, approximately in line with the last 12 months. Per-share earnings are expected to increase 2.3% to RM0.14. Before this earnings report, the analyst had been forecasting revenues of RM1.58b and earnings per share (EPS) of RM0.15 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM1.41, with the analyst clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that CSC Steel Holdings Berhad's revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2024 being well below the historical 5.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CSC Steel Holdings Berhad.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CSC Steel Holdings Berhad. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at RM1.41, with the latest estimates not enough to have an impact on their price target.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for CSC Steel Holdings Berhad that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.