The Q3 earnings season has started on a positive note and has added to the prevailing optimism in the market. Several key sectors such as Banking and Industrial Production have seen a growth in earnings for companies that have reported last week end. So far, 34 S&P 500 members have reported their quarterly results. Going by their quarterly numbers, we note that earnings and revenues have inched up 1.3% and 2.9%, respectively, on a year-over-year basis.
The transportation sector, however, appears to be lagging behind on the earnings front. With 20% of the transportation companies having reported earnings as of Oct 14, we observed a year-over-year decline of 3.3% in earnings. Nonetheless, revenues have grown 5.8% year over year. Notably, all companies beat earnings estimates and 66.7% surpassed revenue expectations. Outlook for the transportation sector this quarter is not very encouraging either with earnings expected to be down by 19.8% from the prior-year quarter.
With more companies slated to release their financial numbers this week, we expect a clearer insight into the performance of the sector. Meanwhile, let’s take a look at these four transportation companies that are scheduled to report their Q3 numbers on Oct 20.
American Airlines Group Inc. (AAL - Free Report) is a leading U.S. airline company with a widespread global network. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or atleast 3 (Hold) – to increase the odds of an earnings surprise. The company carries a Zacks Rank #3 and an Earnings ESP of +3.01% (Most Accurate estimate stands at $1.71 while the Zacks Consensus Estimate is pegged at $1.66), which makes us reasonably confident of an earnings beat (Read more: American Airlines Q3 Earnings: A Beat in the Cards?).
Union Pacific Corp. (UNP - Free Report) is a renowned U.S. Class 1 railroad company. The company also has other business segments including trucks business. It carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has an Earnings ESP of 0.00% because both the Zacks Consensus Estimate and Most Accurate Estimate are pegged at $1.39. Despite the company’s favorable Zacks Ranks, its 0.00% ESP complicates our surprise prediction (Read more: Union Pacific Q3 Earnings: Is a Surprise in Store?).
GATX Corp. (GATX - Free Report) is a finance and leasing company catering to the transportation sector. It carries a Zacks Rank #3. The company’s Earnings ESP is pegged at -3.01% as Most Accurate estimate stands at $1.29 while the Zacks Consensus Estimate is of $1.33. This makes our surprise prediction inconclusive. However, it should be noted that the company has managed to pull an earnings surprise in each of the last four quarters with an average beat of 16.56%.
Werner Enterprises, Inc. (WERN - Free Report) is a transportation company with operations across the U.S. The company carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -7.69%. This is because Most Accurate estimate of 24 cents is lower than the Zacks Consensus Estimate pegged at 26 cents. Please note, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
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The Q3 earnings season has started on a positive note and has added to the prevailing optimism in the market. Several key sectors such as Banking and Industrial Production have seen a growth in earnings for companies that have reported last week end. So far, 34 S&P 500 members have reported their quarterly results. Going by their quarterly numbers, we note that earnings and revenues have inched up 1.3% and 2.9%, respectively, on a year-over-year basis.
The transportation sector, however, appears to be lagging behind on the earnings front. With 20% of the transportation companies having reported earnings as of Oct 14, we observed a year-over-year decline of 3.3% in earnings. Nonetheless, revenues have grown 5.8% year over year. Notably, all companies beat earnings estimates and 66.7% surpassed revenue expectations. Outlook for the transportation sector this quarter is not very encouraging either with earnings expected to be down by 19.8% from the prior-year quarter.
With more companies slated to release their financial numbers this week, we expect a clearer insight into the performance of the sector. Meanwhile, let’s take a look at these four transportation companies that are scheduled to report their Q3 numbers on Oct 20.
American Airlines Group Inc. (AAL - Free Report) is a leading U.S. airline company with a widespread global network. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or atleast 3 (Hold) – to increase the odds of an earnings surprise. The company carries a Zacks Rank #3 and an Earnings ESP of +3.01% (Most Accurate estimate stands at $1.71 while the Zacks Consensus Estimate is pegged at $1.66), which makes us reasonably confident of an earnings beat (Read more: American Airlines Q3 Earnings: A Beat in the Cards?).
Union Pacific Corp. (UNP - Free Report) is a renowned U.S. Class 1 railroad company. The company also has other business segments including trucks business. It carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has an Earnings ESP of 0.00% because both the Zacks Consensus Estimate and Most Accurate Estimate are pegged at $1.39. Despite the company’s favorable Zacks Ranks, its 0.00% ESP complicates our surprise prediction (Read more: Union Pacific Q3 Earnings: Is a Surprise in Store?).
GATX Corp. (GATX - Free Report) is a finance and leasing company catering to the transportation sector. It carries a Zacks Rank #3. The company’s Earnings ESP is pegged at -3.01% as Most Accurate estimate stands at $1.29 while the Zacks Consensus Estimate is of $1.33. This makes our surprise prediction inconclusive. However, it should be noted that the company has managed to pull an earnings surprise in each of the last four quarters with an average beat of 16.56%.
Werner Enterprises, Inc. (WERN - Free Report) is a transportation company with operations across the U.S. The company carries a Zacks Rank #4 (Sell) and has an Earnings ESP of -7.69%. This is because Most Accurate estimate of 24 cents is lower than the Zacks Consensus Estimate pegged at 26 cents. Please note, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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