Earnings Miss: Singapore Telecommunications Limited Missed EPS By 11% And Analysts Are Revising Their Forecasts

Singapore Telecommunications Limited (SGX:Z74) just released its latest full-year report and things are not looking great. Singapore Telecommunications missed earnings this time around, with S$16b revenue coming in 2.1% below what the analysts had modelled. Statutory earnings per share (EPS) of S$0.12 also fell short of expectations by 11%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Singapore Telecommunications

Taking into account the latest results, the current consensus from Singapore Telecommunications' 16 analysts is for revenues of S$16.1b in 2023, which would reflect a reasonable 3.8% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 97% to S$0.14. In the lead-up to this report, the analysts had been modelling revenues of S$16.2b and earnings per share (EPS) of S$0.16 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at S$3.15, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Singapore Telecommunications at S$4.40 per share, while the most bearish prices it at S$2.70. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Singapore Telecommunications is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.8% annualised growth until the end of 2023. If achieved, this would be a much better result than the 2.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.5% per year. So it looks like Singapore Telecommunications is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Singapore Telecommunications. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at S$3.15, with the latest estimates not enough to have an impact on their price targets.

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 Simply Wall St, we have a full range of analyst estimates for Singapore Telecommunications going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Singapore Telecommunications 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.