Asia Inc: glass now more half-full than half-empty?

A man walks in front of skyscrapers at the financial Central district in Hong Kong February 25, 2009.

MELBOURNE/SINGAPORE (Reuters) - The worst is probably over for Asia's top firms as the region's stimulus-driven economic recovery gains ground, justifying markets' faith in improved company earnings.

In a Reuters check-up on leading Asian companies from Japan to India, the corporate outlook seems to be improving, especially in China and Australia, though Japanese firms are reining in expectations.

Of 100 companies, 31 had a positive to very positive rating on their near-term outlook, up from 26 three months ago. Those with a negative to very negative view fell to 22 from 37 in April-June, while the neutrals rose to 47 from 37.

Recent stock market gains have reflected hopes for a recovery in earnings growth, with the MSCI index of Asia shares .MIAS00000PUS up 60 percent from its low in March.

"Companies are taking their perspective from what they're seeing in their profits -- the sign that things are hitting a bottom, but there's still a lot of uncertainty around," said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney.

The biggest concern for everyone, from miners and automakers to shipbuilders and consumer electronics manufacturers, is whether U.S. consumer demand will recover or whether domestic Asian demand can fill the gap without government handouts.

"Although this year's numbers and next year's (earnings) numbers will look better in Asia than they do in developed markets in the west, we still think there are fairly major challenges ahead," said Tony Stringer, head of Asia-Pacific corporate ratings at Fitch Ratings.

The outlook for resources, closely tied to economic fortunes, appears bright for the likes of Chinese oil refiners, Sinopec (0386.HK) and Petrochina (0857.HK), as well as South Korean steelmaker POSCO (005490.KS) and palm oil firm Wilmar (WLIL.SI).

Some analysts, however, say earnings revisions in Asia, already at a 20-year high, are unlikely to improve further.

"It's hard to see how it's going to get better for earnings revisions from here," Citi's Asia Pacific equity strategist Markus Rosgen wrote in a note. "In fact, we are starting to see the first signs of downward revisions."

Electronics makers in Japan are more guarded on their outlook as several focus on restructuring and as a surging yen, which hits exporters, helps South Korean rivals capture market share.

The outlook for the likes of Canon (7751.T), Sony 67458.T and Fujitsu (6702.T) has dipped, but South Korea's Samsung Electronics (005930.KS) and LG Display (034220.KS) remain more positive.

Samsung, the world's top maker of memory chips and flat screen TVs, this week forecast stronger-than-expected quarterly earnings.

(Editing by Ian Geoghegan)