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4 Transportation Stocks Poised for an Earnings Beat in Q4

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The widely diversified Zacks Transportation sector, which includes airlines, railroads, trucking and shipping companies, among others, is being aided by improved freight market conditions and recovery in air-travel demand. However, supply chain disruptions are hurting operations of some of the sector participants. The prevalent pandemic, along with the emergence of newer variants of coronavirus, is concerning for the sector as it has the potential to slow down economic growth and hurt businesses.

Despite headwinds, several companies put up solid performances in the fourth quarter of 2021, reporting better-than-expected earnings and revenues. Their top and bottom lines also showed significant improvement on a year-over-year basis. Those that are yet to report fourth-quarter earnings numbers are Expeditors International of Washington (EXPD - Free Report) , Norfolk Southern Corporation (NSC - Free Report) , Landstar System (LSTR - Free Report) and Gol Linhas Aereas Inteligentes (GOL - Free Report) , to name a few.

What’s in Store for Yet-to-Report Companies?

Improved air-travel demand in Latin America, thanks to ramped up vaccination efforts, is expected to have boosted the top line of Latin American carriers in the fourth quarter.

The fourth-quarter performances of trucking and railroad companies are likely to have benefited from strong freight market conditions and high freight rates.

However, supply chain disruptions are expected to have affected volumes for railroad companies. The trucking companies also might have experienced weakness in volumes  due to network fluidity challenges.

With fuel expenses comprising a major input cost for transportation companies, escalating fuel prices are expected to have dented the bottom line of these companies in the fourth quarter.

How to Pick Winners?

Given the large number of players operating in the transportation space, picking the right stocks is not an easy task. But our proven model makes it fairly simple. One can shorten the list with the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they report earnings with our Earnings ESP Filter.

Earnings ESP — the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate — is our proprietary methodology for determining the stocks with maximum chances of delivering positive earnings surprises in their next announcements. Our research shows that for stocks with this perfect combination, chances of a beat are as high as 70%.

Our Choices

Below we list four transportation stocks that have the right mix of elements to pull off positive surprises this earnings season.

Expeditors has an Earnings ESP of +2.97% and a Zacks Rank #1. The company will release fourth-quarter earnings numbers on Feb 22. Thanks to coronavirus-induced cancellation of multiple passenger flights (that usually carry freight as well as passenger luggage), which has increased the usage of charters, EXPD’s airfreight services are expected to have been boosted in the fourth quarter.

However, escalating operating expenses with high costs in all of its segments is likely to have dented Expeditors’ bottom line. The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 29.1%.

Norfolk Southern has an Earnings ESP of +0.16% and a Zacks Rank #3. The company is set to release fourth-quarter results on Jan 26. Higher coal volumes are likely to have aided NSC’s fourth-quarter performance.

However, supply chain disruptions are expected to have resulted in lower volumes at Norfolk Southern’s intermodal segment. Additionally, rising fuel costs might have hurt the company’s bottom line. The railroad company has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 7.1%.


Landstar has an Earnings ESP of +1.56% and a Zacks Rank #3. The company will announce fourth-quarter financial numbers on Jan 26. LSTR’s fourth-quarter performance is expected to have benefited from robust revenues at the truck transportation segment owing to strong demand in the van truckload business.

However, significant increase in purchased transportation expenses might have hurt Landstar’s bottom line in the fourth quarter. The company’s earnings have trumped the Zacks Consensus Estimate in each of the last four quarters, the average beat being 11.4%.

Landstar System, Inc. Price and EPS Surprise

Landstar System, Inc. Price and EPS Surprise

Landstar System, Inc. price-eps-surprise | Landstar System, Inc. Quote


Gol Linhas has an Earnings ESP of +8.29% and a Zacks Rank #3. The company is slated to release fourth-quarter earnings numbers on Feb 17. Uptick in domestic travel demand, as well as the resumption of international operations in November, is expected to have aided GOL’s fourth-quarter performance. The airline expects demand to increase 15.4% in the fourth quarter of 2021 from the year-ago level.

However, escalating fuel costs might have partly hurt Gol Linhas’ fourth-quarter performance. The company’s earnings have outperformed the Zacks Consensus Estimate in only one of the last four quarters while missing the same in two and matching in one.


Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.