By Kenneth Lim

The market could be heading towards a raft of poor results as companies begin to report their second-quarter earnings, analysts say.

Volatile markets and persistent macroeconomic concerns suggest that cyclicals like commodity plays could be underperformers, while defensive stocks may display resilience. The property sector could see a pick-up after a slow start to 2012.

"Generally, we expect slower revenue growth and some level of cost pressure for Q2 2012 due to the uncertain economic outlook and inflationary pressure," said Ng Kian Teck, lead analyst at Sias Research.

As the mid-year earnings season goes into full swing - Singapore-listed companies have up to 45 days to report quarterly results and up to 60 days to report full-year numbers - analysts say the upcoming crop of results are likely to reflect a weak Q2.

"I'm expecting the results will probably show a decline, quarter-on-quarter and maybe even year-on-year as well," said Phillip Securities research head Lee Kok Joo.

"If you look at the [purchasing managers' index] data that has come out in the past few months, whether in Europe or the US, it shows some kind of contraction. So when you look at it from that perspective, results for the second quarter will not be very strong."

While there could be a number of disappointments, the market has tempered its expectations to a certain degree.

"Generally, we expect the reporting season to deliver earnings broadly in line with market expectations, which are light to start with," said Credit Suisse Private Banking's head of South-east Asia equities, Kum Soek Ching.

"Market earnings revisions have been positive this year with the upgrade momentum only just flattening. Consensus is now expecting 7.9 per cent 2012 earnings-per-share growth, which we expect to be met."

Mr Ng of Sias Research said earnings could actually exceed consensus slightly because "many analysts have been rather conservative in their estimates".

Where disappointments are concerned, analysts unanimously expect the commodities sector to fall short.

"I think to a certain extent there might be disappointments especially in the commodities sector, because commodity prices have been coming down, and I don't think a lot of analysts have made adjustments yet," Phillip Securities' Mr Lee said.

Ms Kum also noted that lower crude palm oil prices will probably hit plantation plays.

"However, we do not expect post-results earnings downgrades since we expect management guidance for the second half of 2012 to be positive in view of stronger CPO pricing prospects going forward," she said.

Banks, too, could struggle with the historically high market volatility that has squeezed trading activity around the world.

"Markets have been volatile, so banks' trading income is not so strong," said Kenneth Ng, head of research at CIMB.