Back to top

Image: Bigstock

Atlas Air (AAWW) to Report Q3 Earnings: What's in Store?

Read MoreHide Full Article

Atlas Air Worldwide Holdings is scheduled to report third-quarter 2020 results on Nov 5, before market open.

The company has a decent surprise record with its earnings having outshined the Zacks Consensus Estimate in three of the last four quarters while missing the mark in the remaining one. The average beat is in excess of 100%.

Moreover, the Zacks Consensus Estimate for third-quarter earnings has been stable at $2.34 per share in the past 60 days.

Against this backdrop, let’s take a look at the factors that might have impacted the company’s September-quarter performance.

We expect Atlas Air’s third-quarter performance to have been buoyed by upbeat airfreight demand amid the current turbulent scenario. In a bid to match this demand uptick, the company made adjustments to its fleet like reactivating three of its 747-400 converted freighters apart from operationalizing the 777 freighter from the company’s dry leasing operation.

Moreover, third-quarter results are likely to benefit from higher commercial charter yields. Notably, the Zacks Consensus Estimate for direct contribution from the charter segment indicates an increase of more than 200% from the reported figure in third-quarter 2019.

Additionally, moderate fuel costs are likely to have aided the bottom line in the to-be-reported quarter. Notably, the Zacks Consensus Estimate for expenses on aircraft fuel implies a 14.6% decline from the prior-year quarter’s reported number.

However, revenues from the ACMI segment are likely to have been lower in the to-be-reported quarter due to reduced block hours following the redeployment of 747-400 aircraft to the charter unit. Notably, the Zacks Consensus Estimate for ACMI segment revenues estimates a decrease of 2.5% from the reported figure in third-quarter 2019.

What Does the Zacks Model Say?

Our proven Zacks model does not predict an earnings beat for Atlas Air this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here as illustrated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Atlas Air has an Earnings ESP of 0.00% as the Most Accurate Estimate of $2.34 is in line with the Zacks Consensus Estimate.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Atlas Air sports a Zacks Rank of 1, currently.

Highlights of Q2 Earnings

In the last reported quarter, the company reported earnings per share (excluding $1.70 from non-recurring items) of $4.71, surpassing the Zacks Consensus Estimate of $2.07. Revenues too surged in excess of 100% to $825.3 million from the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $769.1 million.

Transportation Stock to Consider

Investors interested in the broader Transportation sector may check out Genco Shipping & Trading Limited (GNK - Free Report) as it possesses the perfect combination of elements to beat estimates this earnings season.

Genco Shipping has an Earnings ESP of +33.33% and a Zacks Rank #3, currently. This company is set to release third-quarter financial numbers on Nov 4.

Snapshots of Sectorial Releases

Investors may also want to recapitulate the third-quarter results of a few companies, earnings of which surpassed estimates. Below we present the performance releases of two such sectorial players.

United Parcel Service’s (UPS - Free Report) third-quarter 2020 earnings (excluding 4 cents from non-recurring items) per share of $2.28 surpassed the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. UPS, currently carrying a Zacks Rank #2, generated revenues worth $21,238 million in the quarter, outpacing the Zacks Consensus Estimate of $20,079.6 million.

Old Dominion Freight Line’s (ODFL - Free Report) third-quarter 2020 earnings per share of $1.71 outpaced the Zacks Consensus Estimate of $1.51. Moreover, the bottom line improved 24.8% year over year. This upside was driven by a record improvement in the operating ratio (operating expenses as a percentage of revenues) on the back of the company’s cost-containment efforts. Revenues of $1058.2 million too surpassed the Zacks Consensus Estimate marginally. The stock carries a Zacks Rank of 2 currently.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>

Published in