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Zacks Earnings Trends Highlights: Southwest Air, CSX and J. B. Hunt
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For Immediate Release
Chicago, IL – May 26, 2022 – Zacks Director of Research Sheraz Mian says, "The Energy sector isn't alone in enjoying positive estimate revisions -- estimates have been going up for 5 other sectors."
The Sectors Enjoying Positive Estimate Revisions for Q2
Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
· For 2022 Q2, total S&P 500 earnings are expected to increase +2.7% from the same period last year on +9.4% higher revenues and net margin compression of 85 basis points.
· Excluding the hefty contribution from the Energy sector, total Q2 earnings for the rest of the S&P 500 index are expected to be down -4.2% on +7.2% higher revenues.
· Q2 earnings estimates have gone up for 6 sectors, with the biggest gains in the Energy sector, followed up by Transportation, Basic Materials, Construction, Consumer Staples, and Autos.
We all know that the earnings outlook for the Energy sector is extremely good, with the Zacks Energy sector currently expected to bring in $49.9 billion in earnings in Q2, or year-over-year earnings growth of +178.8%.
Analysts have been feverishly raising their earnings estimates, with the current $49.9 billion estimate up +44.7% since the quarter got underway on April 1st.
The sector's full year earnings outlook is even more impressive, with the current aggregate earnings estimate of $182.3 billion, up +107.8% over 2021, and it has increased by an impressive +66.3% since the start of the year.
Had it not been for the hefty earnings contribution from the Energy sector, full-year 2022 earnings for the S&P 500 index would be up only +3.8% instead of the +8.8% growth as a whole. Earnings growth for the index moves into negative territory for Q2 on an ex-Energy basis.
The Energy sector isn't alone in enjoying positive estimate revisions -- estimates have been going up for 5 other sectors, including Transportation, Basic Materials, Construction, Consumer Staples, and Autos.
Of all of these sectors, the positive revisions to the Transportation sector are the most counter-intuitive since all of these operators are at the receiving end of higher energy prices. But we are seeing the opposite, with estimates for air carriers like Southwest Air (LUV - Free Report) ), railroad operators like CSX Corp. (CSX - Free Report) ) and Truckers like J. B. Hunt (JBHT - Free Report) ) going up. That said, estimates for the railroad operators and truckers aren't going up as much as they are for the air carriers, but they are nevertheless going up.
The most logical explanation for this seemingly dichotomous situation is that these Transportation operators are enjoying strong pricing power on the back of a robust demand environment.
The Overall Earnings Picture
Looking at the Q1 earnings season as a whole, total S&P 500 earnings are expected to be up +9.6% on +13.5% higher revenues. This is a significant deceleration from what we have been seeing in the preceding quarters.
There is a rising degree of uncertainty about the outlook, being driven by a lack of macroeconomic visibility in a backdrop of Fed monetary policy tightening.
The Ukraine situation is exacerbating pre-existing supply-chain issues, which combined with its impact on oil prices, is weighing on the inflation situation in hard-to-predict ways. The evolving earnings revisions trend will reflect this macro backdrop.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Southwest Air, CSX and J. B. Hunt
For Immediate Release
Chicago, IL – May 26, 2022 – Zacks Director of Research Sheraz Mian says, "The Energy sector isn't alone in enjoying positive estimate revisions -- estimates have been going up for 5 other sectors."
The Sectors Enjoying Positive Estimate Revisions for Q2
Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
· For 2022 Q2, total S&P 500 earnings are expected to increase +2.7% from the same period last year on +9.4% higher revenues and net margin compression of 85 basis points.
· Excluding the hefty contribution from the Energy sector, total Q2 earnings for the rest of the S&P 500 index are expected to be down -4.2% on +7.2% higher revenues.
· Q2 earnings estimates have gone up for 6 sectors, with the biggest gains in the Energy sector, followed up by Transportation, Basic Materials, Construction, Consumer Staples, and Autos.
We all know that the earnings outlook for the Energy sector is extremely good, with the Zacks Energy sector currently expected to bring in $49.9 billion in earnings in Q2, or year-over-year earnings growth of +178.8%.
Analysts have been feverishly raising their earnings estimates, with the current $49.9 billion estimate up +44.7% since the quarter got underway on April 1st.
The sector's full year earnings outlook is even more impressive, with the current aggregate earnings estimate of $182.3 billion, up +107.8% over 2021, and it has increased by an impressive +66.3% since the start of the year.
Had it not been for the hefty earnings contribution from the Energy sector, full-year 2022 earnings for the S&P 500 index would be up only +3.8% instead of the +8.8% growth as a whole. Earnings growth for the index moves into negative territory for Q2 on an ex-Energy basis.
The Energy sector isn't alone in enjoying positive estimate revisions -- estimates have been going up for 5 other sectors, including Transportation, Basic Materials, Construction, Consumer Staples, and Autos.
Of all of these sectors, the positive revisions to the Transportation sector are the most counter-intuitive since all of these operators are at the receiving end of higher energy prices. But we are seeing the opposite, with estimates for air carriers like Southwest Air (LUV - Free Report) ), railroad operators like CSX Corp. (CSX - Free Report) ) and Truckers like J. B. Hunt (JBHT - Free Report) ) going up. That said, estimates for the railroad operators and truckers aren't going up as much as they are for the air carriers, but they are nevertheless going up.
The most logical explanation for this seemingly dichotomous situation is that these Transportation operators are enjoying strong pricing power on the back of a robust demand environment.
The Overall Earnings Picture
Looking at the Q1 earnings season as a whole, total S&P 500 earnings are expected to be up +9.6% on +13.5% higher revenues. This is a significant deceleration from what we have been seeing in the preceding quarters.
There is a rising degree of uncertainty about the outlook, being driven by a lack of macroeconomic visibility in a backdrop of Fed monetary policy tightening.
The Ukraine situation is exacerbating pre-existing supply-chain issues, which combined with its impact on oil prices, is weighing on the inflation situation in hard-to-predict ways. The evolving earnings revisions trend will reflect this macro backdrop.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.