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ZTO Express (ZTO) Q3 Earnings Surpass Estimates, Rise Y/Y

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ZTO Express (Cayman) Inc.’s (ZTO - Free Report) third-quarter 2018 earnings of 20 cents per share beat the Zacks Consensus Estimate of 18 cents. Moreover, the bottom line improved significantly from the year-ago figure on the back of revenue growth.

The top line surged more than 34% year over year to $616.6 million (RMB4,234.6 million). This upside was driven by a 23.3% year-over-year increase in revenues from the company’s express delivery services unit.

Segmental revenues were boosted by a 36.5% improvement in parcel volume to 2,096 million. Freight forwarding services (acquired during the fourth quarter of 2017) contributed 6.9% to the top line. The 31.3% rise in revenues from sales of accessories was primarily attributable to increased sales of thermal paper used for printing digital waybills.

Total operating expenses at this China-based company were up 21% to RMB233.6 million. Higher selling, general and administrative (SG&A) expenses induced a rise in operating expenses. Apart from other factors, higher salary and accrued bonus caused a rise in SG&A expenses during the reported period.

ZTO Express (Cayman) Inc. Price, Consensus and EPS Surprise

 

ZTO Express (Cayman) Inc. Price, Consensus and EPS Surprise | ZTO Express (Cayman) Inc. Quote


Q4 Outlook

For the fourth quarter, ZTO Express anticipates parcel volume between 2,620 million and 2,660 million, reflecting a year-over-year increase in the 30-32% range. Adjusted net income is expected between RMB1.2 billion and RMB1.3 billion, mirroring a year-over-year improvement in the 13.4-22.8% band.

Zacks Rank & Key Picks

ZTO Express carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Transportation sector are Air France-KLM SA (AFLYY - Free Report) , International Consolidated Airlines Group SA (ICAGY - Free Report) and Spirit Airlines, Inc. (SAVE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Air France-KLM have rallied more than 30% in the past six months while the same of International Consolidated Airlines and Spirit Airlines has gained more than 7% and 41%, respectively, in a year.

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