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ZTO Express (ZTO) to Post Q1 Earnings: What's in the Cards?

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ZTO Express (ZTO - Free Report) is set to release first-quarter 2022 earnings results on May 25, after market close.

ZTO has a mixed surprise history, as its earnings surpassed the Zacks Consensus Estimate in two of the last four quarters, missed the same on one occasion and matched the mark in the remaining quarter. The average earnings miss is 1.2%. The Zacks Consensus Estimate for first-quarter earnings has been flat at 23 cents per share in the past 60 days.

Let’s discuss the factors that might have impacted this Shanghai-based courier company’s March-quarter performance.

ZTO Express Cayman Inc. Price and EPS Surprise

ZTO Express Cayman Inc. Price and EPS Surprise

ZTO Express Cayman Inc. price-eps-surprise | ZTO Express Cayman Inc. Quote

We expect selling, general and administrative expenses to have been high in the to-be-reported quarter due to escalated compensation and benefits and office expenditures. Additionally, gross margin deterioration (due to intense competition-led decline in average selling prices) is expected to hurt results. These might have dented ZTO Express’ first-quarter performance.

However, ZTO Express’ express delivery services segment is likely to have performed well in the first quarter on the back of strong parcel volumes. Akin to the last few quarters, parcel volumes are likely to have been aided by rapid e-commerce growth in the quarter to be reported as well.

Earnings Whispers

The proven Zacks model does not predict an earnings beat for ZTO Express this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. However, this is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: ZTO Express has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ZTO Express currently carries a Zacks Rank #3.

Highlights of Q4 Earnings

ZTO Express’ fourth-quarter 2021 earnings of 34 cents per share surpassed the Zacks Consensus Estimate of 30 cents. The bottom line surged more than 40% year over year on reduction in operating expenses. Total revenues of $1,446.4 million increased in double digits year over year owing to a rise in revenues at the core express delivery services unit (contributing 91.4% to the top line).

Sectorial Snapshots

Within the broader Transportation sector, J.B. Hunt Transport Services (JBHT - Free Report) , CSX Corporation (CSX - Free Report) and United Airlines (UAL - Free Report) recently reported first-quarter 2022 results.

J.B. Hunt reported better-than-expected first-quarter 2022 earnings. Quarterly earnings of $2.29 per share surpassed the Zacks Consensus Estimate of $1.91. The bottom line surged 67.2% year over year on the back of higher revenues across all segments.

Total operating revenues of $3,488.6 million also outperformed the Zacks Consensus Estimate of $3,260.5 million. The top line jumped 33.3% year over year. JBHT currently carries a Zacks Rank #3.

CSX Corp’s first-quarter 2022 earnings of 39 cents per share beat the Zacks Consensus Estimate by a penny despite the decrease in overall volumes as supply-chain issues continue to dent results. The bottom line improved 25.81% year over year owing to higher revenues, aided by increased shipping rates.

Total revenues of $3,413 million outperformed the Zacks Consensus Estimate of $3291.2 million. The top line increased 21.33% year over year. CSX carries a Zacks Rank of 3 at present.

United Airlines incurred a loss of $4.24 per share in the first quarter of 2022, wider than the Zacks Consensus Estimate of a loss of $4.19. This is the ninth consecutive quarterly loss incurred by UAL as coronavirus concerns continue to weigh on air-travel demand.

Operating revenues of $7,566 million also fell short of the Zacks Consensus Estimate of $7,657.2 million. UAL is presently Zacks #3 Ranked.