By Goh Eng Yeow, Senior Correspondent

AT FIRST sight, the heady gains made in the stock market in the past month seem to suggest that corporate Singapore is back in the pink of health, after braving the most ferocious financial storm in decades.

Stock prices are one thing. But take a closer look at the financial results released so far in the corporate reporting season. They have been mixed at best, indicating that companies are still trying to regain their footing.

True, most of them have been reporting decent profits. But like their counterparts in Europe and the United States, they have done so only because they have taken a chainsaw to costs.

Even then, the relentless headwinds from the global financial crisis have badly buffeted those firms with businesses tied to the well-being of the global economy.

Singapore Airlines (SIA), one local brand that is best-admired internationally, last week reported a quarterly loss of $307 million and warned it might end the financial year ending March 31 in the red.

Giant property developer CapitaLand posted a quarterly loss of $156.9 million - its first such loss in six years.

Even rig-builder Keppel Corp, which reported a record quarterly profit of $422.2 million, has raised a concern or two among analysts. Since the start of the year, it has yet to win any major rig order.

However, it is not the earnings numbers that many market watchers are worried about. Rather, it is the eye-popping drop in sales revenues that has kept them agonising over the viability of the current liquidity-drenched market rally.

The most worrisome among these revenue slumps is perhaps SIA's first-quarter numbers, which showed a staggering drop of $1.26 billion to $2.87 billion.

To build its revenue back to the lofty level of $4.13 billion achieved in the same quarter last year, it would have to increase its sales by 43 per cent.

To do so, it will have to carry a lot more passengers and cargo. But it currently also faces a daunting task in defending its turf, as budget-conscious travellers switch to cheaper carriers and budget airlines.

Even companies with less international business exposure are showing the same worrying drop in revenues. Take CapitaLand. For its second quarter, revenue fell $229 million to $591.14 million.

True, the residential property market seems to be sizzling hot and that should represent a gold mine for the property giant as it launches new condos for sale.

The developer might also not have recognised some of the revenues from the completed units which it handed to home-owners earlier this year.

Nevertheless, in percentage terms, CapitaLand will have to grow its revenues by almost the same margin as SIA - 39 per cent - just to get back to the same prosperous footing that it was on as recently as last year.

To dress up the bottom line figures, companies are slashing their costs by cutting staff pay.

This may help to alleviate the impact which falling sales might have on their earnings.

However, at some point, investors may become tired of the cost-cutting story - even though they appear to be cheering such measures.

For the current market rally to have legs, what is needed is a sustainable growth in sales. But this is the tricky part of the equation which many companies will have difficulty in delivering, given the uncertain economic climate.

One question: Can SIA, CapitaLand and the rest of the world's big companies find enough customers to boost their revenues by 40 per cent to get back to last year's levels and, if they can, how soon can that be achieved?

Achieving the growth rates experienced during the boom years is going to be difficult.

The global economic slowdown has been so deep that no one is predicting that the road back to health would be smooth.

Last weekend, President Barack Obama warned that it would be many months before the world's bellwether economy - the United States - could get out of recession.

This may well mean that the market has run well ahead of itself in its generous valuation of blue chips in the recent run-up.

Despite the market's apparent assumption of cloudless, blue skies as far as the eye can see, the weather may well stay overcast for many companies in the days ahead.

This article was first published in The Straits Times.