SkyWest, Inc. (SKYW - Free Report) is slated to report third-quarter 2018 results on Oct 30, after market close.
In the second quarter, the company delivered better-than-expected earnings and revenues. Moreover, the bottom line improved significantly year over year on the back of lower effective tax rate. Also, the top line benefited from the company’s improved fleet mix.
SkyWest has an impressive surprise history, beating estimates in each of the trailing four quarters with an average beat of 14%.
Let’s see what’s in store for the company in the third quarter of 2018.
Factors at Play
SkyWest is expected to perform well in the third quarter on the back of efforts to modernize fleet and streamline operations. The company continues to receive delivery of the recently-launched E175SC and other E175 aircraft. These planes are expected to enhance growth and generate strong cash flows in the to-be-reported quarter.
The new tax law (Tax Cuts and Jobs Act) is a boon for U.S.-based transportation companies like SkyWest. The significant cut in corporate tax rate is likely to boost cash flow, which will drive the bottom line in the third quarter.
Notably, shares of the company have outperformed the industry in the July-September period. The stock has gained 13.5% compared with the industry’s rise of 7.6%.
However, escalating fuel costs and incentives to retain pilots are likely to weigh on the SkyWest’s bottom-line performance in the soon-to-be-reported quarter. The company expects capital spending (pertaining to non-aircraft acquisitions) in the range of $25-$35 million.
Additionally, the company plans to invest $70 million (own capital) and raise long-term debt of $400 million in line with delivery of 20 E175 aircrafts. This will increase the company’s debt load
What Does the Model Say?
Our proven model shows that SkyWest is likely to beat estimates in the to-be-reported quarter, as it has the perfect combination of the following key ingredients:
Earnings ESP: SkyWest has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SkyWest carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have higher chances of beating estimates.
Conversely, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Investors interested in the broader Transportation Sector may consider other companies with the right combination of elements to beat estimates in their upcoming releases:
ArcBest Corporation (ARCB - Free Report) has an Earnings ESP of +4.14% and a Zacks Rank #1. The company will release third-quarter 2018 results on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
C.H. Robinson Worldwide, Inc. (CHRW - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2. The company will release third-quarter 2018 results on Oct 30.
Genesee & Wyoming Inc. has an Earnings ESP of +0.30% and a Zacks Rank #3. The company will release third-quarter 2018 results on Oct 30.
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SkyWest, Inc. (SKYW - Free Report) is slated to report third-quarter 2018 results on Oct 30, after market close.
In the second quarter, the company delivered better-than-expected earnings and revenues. Moreover, the bottom line improved significantly year over year on the back of lower effective tax rate. Also, the top line benefited from the company’s improved fleet mix.
SkyWest has an impressive surprise history, beating estimates in each of the trailing four quarters with an average beat of 14%.
Let’s see what’s in store for the company in the third quarter of 2018.
Factors at Play
SkyWest is expected to perform well in the third quarter on the back of efforts to modernize fleet and streamline operations. The company continues to receive delivery of the recently-launched E175SC and other E175 aircraft. These planes are expected to enhance growth and generate strong cash flows in the to-be-reported quarter.
The new tax law (Tax Cuts and Jobs Act) is a boon for U.S.-based transportation companies like SkyWest. The significant cut in corporate tax rate is likely to boost cash flow, which will drive the bottom line in the third quarter.
Notably, shares of the company have outperformed the industry in the July-September period. The stock has gained 13.5% compared with the industry’s rise of 7.6%.
However, escalating fuel costs and incentives to retain pilots are likely to weigh on the SkyWest’s bottom-line performance in the soon-to-be-reported quarter. The company expects capital spending (pertaining to non-aircraft acquisitions) in the range of $25-$35 million.
Additionally, the company plans to invest $70 million (own capital) and raise long-term debt of $400 million in line with delivery of 20 E175 aircrafts. This will increase the company’s debt load
What Does the Model Say?
Our proven model shows that SkyWest is likely to beat estimates in the to-be-reported quarter, as it has the perfect combination of the following key ingredients:
Earnings ESP: SkyWest has an Earnings ESP of +0.36%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SkyWest carries a Zacks Rank #3 (Hold). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have higher chances of beating estimates.
Conversely, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Investors interested in the broader Transportation Sector may consider other companies with the right combination of elements to beat estimates in their upcoming releases:
ArcBest Corporation (ARCB - Free Report) has an Earnings ESP of +4.14% and a Zacks Rank #1. The company will release third-quarter 2018 results on Nov 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
C.H. Robinson Worldwide, Inc. (CHRW - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #2. The company will release third-quarter 2018 results on Oct 30.
Genesee & Wyoming Inc. has an Earnings ESP of +0.30% and a Zacks Rank #3. The company will release third-quarter 2018 results on Oct 30.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
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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