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Can Expeditors (EXPD) Retain Beat Streak in Q4 Earnings?

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Expeditors International of Washington Inc (EXPD - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 16.

The Zacks Consensus Estimate for the company’s fourth-quarter earnings has been revised upward by approximately 3% in the past 60 days. Moreover, the company has an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 21.3%. Let’s see whether the company is able to retain its beat streak in its upcoming quarterly results.

Factors to Note

Coronavirus-induced cancellation of multiple passenger flights (that usually carry freight as well as passenger luggage) has increased the usage of charters to meet customer needs. This is expected to have boosted Airfreight Services revenues, as has been the case over the past few quarters.

The anticipated rise in revenues at the Airfreight Services segment, Expeditors’ primary revenue generator, is likely to have driven the top line in the fourth quarter. Additionally, the company’s acquisition of Fleet Logistics’ Digital Platform, completed last May, is expected to have contributed to the top line. Notably, the Zacks Consensus Estimate for total revenues in the fourth quarter indicates a 17.2% jump from the year-ago quarter’s reported number.

However, coronavirus-led slowdown in the economy has been weighing on Expeditors’ volumes. While the impact might not have been much on the Ocean Freight and Ocean Services segment, the Customs Brokerage and Other Services division is likely to reflect some softness in revenues. Additionally, Expeditors’ bottom line might reflect high expenses associated with salaries, cost of transportation and other expenses.

Earnings Whispers

The proven Zacks model predicts an earnings beat for Expeditors this time around. This is because 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Expeditors has an earnings ESP of +0.32%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Expeditors carries a Zacks Rank #3.

Highlights of Q3 Earnings

In the last-reported quarter, the company delivered an earnings surprise of 14.3%. Total revenues also surpassed the Zacks Consensus Estimate. While the top line rose 18.8% year over year, the bottom line surged 21.7%. Results were boosted by uptick in airfreight revenues thanks to coronavirus-induced multiple passenger flight cancellations leading to increased usage of charters.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider Golar LNG Limited (GLNG - Free Report) , Herc Holdings Inc. (HRI - Free Report) and Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , as these stocks too possess the right combination of elements to beat on earnings this reporting cycle.

Golar LNG has an Earnings ESP of +50.00% and a Zacks Rank #3. The company will release fourth-quarter earnings on Feb 25.

Herc Holdings has an Earnings ESP of +9.63% and a Zacks Rank #2. The company will announce fourth-quarter results on Feb 18.

Wabtec has an Earnings ESP of +5.99% and a Zacks Rank #3. The company is set to release fourth-quarter results on Feb 18.

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