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Transportation Stocks' Jan 24 Q4 Earnings: UNP, GATX & CNI
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The Zacks Transportation sector is widely diversified. It houses airlines, railroads, shipping and trucking companies, to name a few.
Only a handful of transportation companies (three S&P 500 members, to be exact) have reported their fourth-quarter 2022 numbers so far.
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 increase 36.8% in fourth-quarter 2022 from the third-quarter reported levels, mainly on ramped-up economic activities.
However, headwinds like supply-chain woes, inflationary pressure and high fuel costs are likely to have hurt the fourth-quarter performance of transportation companies.
Fuel expenses represent a key input cost for any transportation player. High oil price is augmenting fuel costs. Even though oil price declined from their multi-year highs, they remain high. Oil price was up 6.7% in the October-December period.
Given this backdrop, investors interested in the Zacks Transportation sector keenly await the results of Union Pacific Corporation (UNP - Free Report) , GATX Corporation (GATX - Free Report) and Canadian National Railway (CNI - Free Report) , scheduled to be released on Jan 24.
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.
Union Pacific’s results are likely to be boosted by impressive freight revenues as economic activities gain pace. Overall volumes are likely to have improved owing to the easing of labor woes. However, economic uncertainty and high operating expenses, mainly due to elevated fuel costs, are likely to have impacted the fourth-quarter performance. High operating expenses are likely to have led to a deterioration in the operating ratio (operating expenses as a percentage of revenues).
Our proven model does not predict an earnings beat for Union Pacific this season as UNP has an Earnings ESP of -0.20% and a Zacks Rank #3 at present. Notably, our model had not predicted a positive surprise for UNP earlier as well, when its fourth-quarter earnings preview article was issued. At that time, UNP had an Earnings ESP of -0.36% while the Zacks Rank was the same.
GATX’s fourth-quarter performance is likely to have been aided by the gradual improvement in the North American railcar leasing market. As a result, lease revenues are likely to have improved year over year.
However, the inflation-induced economic woes and high operating costs, mainly due to elevated fuel costs are likely to have affected the fourth-quarter performance. Our proven model does not conclusively predict an earnings beat for GATX this season as the company has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
We expect upbeat freight demand and favorable pricing to have boosted Canadian National’s performance in the to-be-reported quarter. Fuel surcharge revenues are also likely to have been high and may have driven the top line. Owing to favorable revenues, operating ratio is likely to have improved on a year-over-year basis in the December quarter. On the flip side, the bottom-line growth is likely to have been restricted due to elevated operating expenses, driven by high fuel price.
Our proven model predicts an earnings beat for Canadian National this season as CNI has an Earnings ESP of +0.61% and a Zacks Rank #3 at present. Notably, our model had predicted a positive surprise for CNI earlier as well, when its fourth-quarter earnings preview article was issued. At that time, CNI had an Earnings ESP of +0.51% while the Zacks Rank was the same.
Canadian National Railway Company Price and EPS Surprise
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Transportation Stocks' Jan 24 Q4 Earnings: UNP, GATX & CNI
The Zacks Transportation sector is widely diversified. It houses airlines, railroads, shipping and trucking companies, to name a few.
Only a handful of transportation companies (three S&P 500 members, to be exact) have reported their fourth-quarter 2022 numbers so far.
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 increase 36.8% in fourth-quarter 2022 from the third-quarter reported levels, mainly on ramped-up economic activities.
However, headwinds like supply-chain woes, inflationary pressure and high fuel costs are likely to have hurt the fourth-quarter performance of transportation companies.
Fuel expenses represent a key input cost for any transportation player. High oil price is augmenting fuel costs. Even though oil price declined from their multi-year highs, they remain high. Oil price was up 6.7% in the October-December period.
Given this backdrop, investors interested in the Zacks Transportation sector keenly await the results of Union Pacific Corporation (UNP - Free Report) , GATX Corporation (GATX - Free Report) and Canadian National Railway (CNI - Free Report) , scheduled to be released on Jan 24.
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.
Union Pacific’s results are likely to be boosted by impressive freight revenues as economic activities gain pace. Overall volumes are likely to have improved owing to the easing of labor woes. However, economic uncertainty and high operating expenses, mainly due to elevated fuel costs, are likely to have impacted the fourth-quarter performance. High operating expenses are likely to have led to a deterioration in the operating ratio (operating expenses as a percentage of revenues).
Our proven model does not predict an earnings beat for Union Pacific this season as UNP has an Earnings ESP of -0.20% and a Zacks Rank #3 at present. Notably, our model had not predicted a positive surprise for UNP earlier as well, when its fourth-quarter earnings preview article was issued. At that time, UNP had an Earnings ESP of -0.36% while the Zacks Rank was the same.
Union Pacific Corporation Price and EPS Surprise
Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote
GATX’s fourth-quarter performance is likely to have been aided by the gradual improvement in the North American railcar leasing market. As a result, lease revenues are likely to have improved year over year.
However, the inflation-induced economic woes and high operating costs, mainly due to elevated fuel costs are likely to have affected the fourth-quarter performance. Our proven model does not conclusively predict an earnings beat for GATX this season as the company has an Earnings ESP of 0.00% and a Zacks Rank #3 at present.
GATX Corporation Price and EPS Surprise
GATX Corporation price-eps-surprise | GATX Corporation Quote
We expect upbeat freight demand and favorable pricing to have boosted Canadian National’s performance in the to-be-reported quarter. Fuel surcharge revenues are also likely to have been high and may have driven the top line. Owing to favorable revenues, operating ratio is likely to have improved on a year-over-year basis in the December quarter. On the flip side, the bottom-line growth is likely to have been restricted due to elevated operating expenses, driven by high fuel price.
Our proven model predicts an earnings beat for Canadian National this season as CNI has an Earnings ESP of +0.61% and a Zacks Rank #3 at present. Notably, our model had predicted a positive surprise for CNI earlier as well, when its fourth-quarter earnings preview article was issued. At that time, CNI had an Earnings ESP of +0.51% while the Zacks Rank was the same.
Canadian National Railway Company Price and EPS Surprise
Canadian National Railway Company price-eps-surprise | Canadian National Railway Company Quote
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