Reacting to Bad Earnings Results

The Q3 2025 earnings season has been a rough one for some of the most popular blue chips on the SGX. UOB reported a profit miss, while Singapore Airlines (SIA) also showed signs of weakness with slowing growth.

When this happens, it’s nerve-wracking. A sea of red appears on our portfolio screens and the first, most powerful instinct is to ask, "Should I sell?"

My philosophy is clear: we should never make rash decisions based on a single quarter's results. One quarter is just 90 days—a blink of an eye in our decades long investing journey. 

Is the Business "Bruised" or "Broken"? 

A "Bruise" is a temporary, short-term problem caused by one-off headwinds. One clear example would be the dip in UOB's net profits caused by extra allowances and card expenses for the quarter. 
 
A "Broken" business has a permanent, structural problem. The business may be having a "Kodak" moment—its technology is obsolete, its brand is permanently damaged, or a new competitor has fundamentally destroyed its profit model.

Does This Quarter Change Our Action Plan?

Long story short, this quarter does not really change anything. The key message you must remember is that earnings can and do turn around. A single bad quarter does not break a multi-decade thesis.
 
While the headlines can be worrying, this quarterly earnings has shown just bruises and not fundamental breaks in some blue chip companies. Therefore, my action plan is simple: I will do nothing, except to follow my original plan.
  • I will not panic sell, that would be a risky, emotional and short-sighted decision.
  • I will continue to buy as planned. A "bruised" company could be trading at a great price.
  • I will continue to take dividends. The dividend is safe, and my reward as a shareholder of the company. 

A single bad quarter is just noise. My job as an investor is to ignore the noise, analyze the long-term health, and have the courage to stick to our boring, proven plan. 

Disclaimer: This blog post is for entertainment purposes only and does not constitute financial advice. Please do your own due diligence. 

Comments

Post a Comment

Popular posts from this blog

2025 Portfolio Review and Why I Don't Limit The Number Of Stocks Owned

2025 is in the books with only 2 and a half trading days left.  2025 is the year I initiated my dividend portfolio and embarked on this hopefully decades-long journey with dividend investing. My portfolio was steady and already printed cash like it was supposed to. In 2025 my  Net Assets  increased by 45%, of which around two thirds can be attributed to personal savings and one third can be attributed to investment returns (capital gains + dividends). Here is a breakdown of the number of dividends I can expect to receive by month next year: Jan: None Feb (3): Kimly, SGX, Suntec Mar (6): Keppel DC REIT, AIMS APAC REIT, PLife, CICT, MIT, MLT Apr (1): DBS May (7): DBS, OCBC, UOB, CLI, CDG, SGX, Suntec Jun (3): AIMS APAC REIT, MIT, MLT Jul (1): Kimly Aug (6): DBS, OCBC, UOB, CICT, CDG, Suntec Sep (5): Keppel DC REIT, AIMS APAC REIT, MIT, MLT, PLife Oct (1): SGX Nov (3): DBS, SGX, Suntec, Dec (3): AIMS APAC REIT, MIT, MLT I currently hold 15 individual counters, giving me...
Read more

Decoding DBS's FY2025 Earnings Call

Image
 This article was written with reference to DBS Media Briefing Transcript and Analyst Call Transcript for FY2025, which can be found at https://www.dbs.com/investors/financials/quarterly-financials During the DBS Full Year 2025 earnings call, CEO Tan Su Shan described the year using two specific words: A "Perfect Storm." She is entirely correct about the macro environment that our Singapore banks had to operate in. Benchmark interest rates (SORA and HIBOR) crashed by almost 2 percentage points. The Singapore Dollar remained brutally strong, hurting the translation of foreign earnings. Finally, the new 15% global minimum tax kicked in, slapping the bank with an additional SGD 400 million in tax expenses. DBS headline net profit fell 3% to SGD 11 billion. But if  you look at the actual operating engine, pre-tax profit rose to a record high of $13.1 billion . Total income grew 3% to a record $22.9 billion .  Deep Deep Deposits When interest rates drop, the textbook resp...
Read more

Decoding UOB’s FY2025 Earnings Call

Image
Writing this with reference to the Earnings Call Transcript posted here: https://finance.yahoo.com/quote/UOVEY/earnings/UOVEY-H2-2025-earnings_call-415512.html UOB just released its Full Year 2025 results, reporting a net profit of SGD 4.7 billion . Operating profit saw a slight 4% dip to SGD 7.7 billion . Here is my breakdown of the latest earnings call, and why UOB remains a core position in my portfolio Falling Rates But Rising Fee Income The market priced in severe NIM compression this year, but UOB's margins have proven stickier than anticipated. While full-year NIM settled at 1.89% , the downward trajectory has slowed. In fact, Q4 NIM ticked up to 1.84% (from 1.82% in Q3) , and management noted that as of end-January 2026, the exit NIM remains stable at 1.82% . This resilience is a direct result of active funding cost management . UOB successfully drove double-digit CASA (Current Account Savings Account) growth in its wholesale banking division . This influx of cheap deposit...
Read more