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Transportation Stocks' Jul 21 Q2 Earnings List: AAL, ALK & UNP

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The Zacks Transportation sector is widely diversified in nature. It houses airlines, railroads, shipping and trucking companies to name a few.

Only one S&P 500 transportation company, namely Delta Air Lines, Inc. (DAL - Free Report) has reported second-quarter 2022 numbers so far. Delta’s revenues came in at $13,824 million, which soared 94% from the year-ago quarter’s reported figure, as air-travel demand rebounded from the pandemic lows.

The gradual uptick in the economic scenario implies that trading volumes are consistently rising. This bodes well for the entire sector. The latest Earnings Preview indicates that the total earnings of transportation companies belonging to the S&P 500 universe are likely to have increased massively in second-quarter 2022 from the first-quarter reported levels, mainly on ramped-up economic activities. With more and more Americans getting inoculated, people are now more confident of going out and resuming their daily activities.

With economic activities picking up the pace, as highlighted above, the respective June-quarter results of American Airlines (AAL - Free Report) , Alaska Air Group (ALK - Free Report) and Union Pacific Corporation (UNP - Free Report) , scheduled to be released on Jul 21, are likely to have been boosted by higher revenues. However, high fuel costs are likely to have hurt all three stocks’ bottom-line performances. In the second quarter (Apr-Jun period), oil prices escalated 5.5% year over year, induced by the Russia-Ukraine war.

Our quantitative model predicts an earnings beat for a company if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This combination increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Let’s delve deeper.

American Airlines’ results are likely to reflect the impacts of upbeat passenger revenues (post the pandemic-led slump), courtesy of strong air-travel demand.  The Zacks Consensus Estimate for second-quarter 2022 revenues is expected to grow 79.3% from the year-ago period’s reading.

However, due to the Russia-Ukraine war, fuel prices have been soaring ever since. AAL estimates average fuel cost per gallon in the $4.00-4.05 range (prior guidance: $3.59-$3.64 band).

Our proven model predicts an earnings beat for American Airlines this season as AAL has an Earnings ESP of +2.33% and a Zacks Rank #3 at present.

High fuel costs are likely to have dented Alaska Air’s second-quarter performance despite increasing passenger revenues on solid air-travel demand. The carrier expects second-quarter economic fuel costs of $3.66 per gallon, suggesting a rise from $2.62 reported in first-quarter 2022.

Alaska Air Group, Inc. Price and EPS Surprise

Alaska Air Group, Inc. Price and EPS Surprise

Alaska Air Group, Inc. price-eps-surprise | Alaska Air Group, Inc. Quote

Our proven model predicts a bottom-line outperformance for Alaska Air this reporting cycle as ALK has an Earnings ESP of +0.54% and a Zacks Rank of 3 at present.

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote

Strong freight demand is expected to have boosted Union Pacific’s freight revenues in the second quarter. Higher volumes, higher fuel surcharge revenue, pricing gains and a favorable business mix are likely to have aided Union Pacific’s top-line performance.

Our proven model does not predict a beat for Union Pacific this earnings season as UNP has an Earnings ESP of -0.32% and a Zacks Rank #3 at present. The same was predicted earlier when the second-quarter earnings preview article was issued. At that time, UAL had an Earnings ESP of -1.69% and the same Zacks Rank.

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