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Transport ETFs Showing Strength on Q4 Earnings Results
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The fourth-quarter earnings picture for the transportation sector has been shaping up well. This is especially true as the sector is the fourth-biggest contributor to both Q4 earnings and revenue growth so far. Earnings for 94% market capitalization of the sector that has been reported already are up 42% on 11.2% revenue growth. But, the earnings and revenue beat ratio of 69.2% and 38.5%, respectively, is not so impressive.
The wave of strong results pushed transportation ETFs higher over the past month. iShares U.S. Transportation ETF (IYT - Free Report) , SPDR S&P Transportation ETF (XTN - Free Report) and First Trust Nasdaq Transportation ETF (FTXR - Free Report) are up 8.9%, 16.9% and 11.7%, respectively (see: all the Industrials ETFs here).
For a better understanding, let’s delve into the results of some well-known industry players:
Transportation Earnings in Brief
The world's largest package delivery company United Parcel Service (UPS - Free Report) surpassed the Zacks Consensus Estimate for earnings and lagged revenue estimates. Earnings of $3.62 per share were 4 cents ahead of the consensus mark but the top line of $27 billion came in below the estimated $27.9 billion.
Major railroads Union Pacific (UNP - Free Report) and Norfolk Southern Corp (NSC - Free Report) came up with both kinds of results. Union Pacific lagged the consensus earnings estimate by 8 cents and the revenue estimate by $43 million, while Norfolk topped the earnings estimate by a penny and the revenue estimate by $60 million (read: 5 Sector ETFs to Play on Upbeat Q4 Revenue Growth).
U.S. airlines Delta Air Lines (DAL - Free Report) and United Continental (UAL - Free Report) reported better-than-expected results. Delta reported earnings per share of $1.48, which outpaced the Zacks Consensus Estimate of $1.31. Revenues of $13.43 billion edged past the consensus mark of $13 billion. United Continental posted earnings of $2.46 per share, outpacing the Zacks Consensus Estimate of $2.07. Revenues of $12.40 billion came in above the estimated $12.23 billion.
Last but not the least, leading trucking carrier J.B. Hunt (JBHT) missed the estimates for earnings by 53 cents per share and for revenues by $145 million.
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 49 securities. The in-focus six firms make up for a combined 48.6% share. From a sector perspective, air freight & logistics, and railroads take the largest share at 30.8% each, while railroads, trucking and airlines round off the next three spots with a double-digit exposure each.
iShares U.S. Transportation ETF has accumulated $796.1 million in its asset base and sees a solid trading volume of around 165,000 shares a day. It charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 4 ETFs to Tap on Solid Q4 GDP Numbers).
SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 49 stocks in its basket. The in-focus firms account for around 2% share each. About 41% of the portfolio is dominated by trucking, while airlines, and air freight & logistics take 26.1% and 18.2% share, respectively.
With AUM of $254.6 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and trades in a volume of around 100,000 shares a day. It has a Zacks ETF Rank #3 with a High risk outlook.
First Trust Nasdaq Transportation ETF offers exposure to the 30 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. The in-focus six firms represent a combined 21.8% share. Railroads, airlines, trucking, and automobiles are the top sectors accounting for a double-digit exposure each.
First Trust Nasdaq Transportation ETF has amassed $63 million in its asset base and charges 60 bps in annual fees. The average trading volume is good at 15,000 shares. FTXR has a Zacks ETF Rank #3.
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Transport ETFs Showing Strength on Q4 Earnings Results
The fourth-quarter earnings picture for the transportation sector has been shaping up well. This is especially true as the sector is the fourth-biggest contributor to both Q4 earnings and revenue growth so far. Earnings for 94% market capitalization of the sector that has been reported already are up 42% on 11.2% revenue growth. But, the earnings and revenue beat ratio of 69.2% and 38.5%, respectively, is not so impressive.
The wave of strong results pushed transportation ETFs higher over the past month. iShares U.S. Transportation ETF (IYT - Free Report) , SPDR S&P Transportation ETF (XTN - Free Report) and First Trust Nasdaq Transportation ETF (FTXR - Free Report) are up 8.9%, 16.9% and 11.7%, respectively (see: all the Industrials ETFs here).
For a better understanding, let’s delve into the results of some well-known industry players:
Transportation Earnings in Brief
The world's largest package delivery company United Parcel Service (UPS - Free Report) surpassed the Zacks Consensus Estimate for earnings and lagged revenue estimates. Earnings of $3.62 per share were 4 cents ahead of the consensus mark but the top line of $27 billion came in below the estimated $27.9 billion.
Major railroads Union Pacific (UNP - Free Report) and Norfolk Southern Corp (NSC - Free Report) came up with both kinds of results. Union Pacific lagged the consensus earnings estimate by 8 cents and the revenue estimate by $43 million, while Norfolk topped the earnings estimate by a penny and the revenue estimate by $60 million (read: 5 Sector ETFs to Play on Upbeat Q4 Revenue Growth).
U.S. airlines Delta Air Lines (DAL - Free Report) and United Continental (UAL - Free Report) reported better-than-expected results. Delta reported earnings per share of $1.48, which outpaced the Zacks Consensus Estimate of $1.31. Revenues of $13.43 billion edged past the consensus mark of $13 billion. United Continental posted earnings of $2.46 per share, outpacing the Zacks Consensus Estimate of $2.07. Revenues of $12.40 billion came in above the estimated $12.23 billion.
Last but not the least, leading trucking carrier J.B. Hunt (JBHT) missed the estimates for earnings by 53 cents per share and for revenues by $145 million.
ETFs in Focus
iShares U.S. Transportation ETF (IYT - Free Report)
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 49 securities. The in-focus six firms make up for a combined 48.6% share. From a sector perspective, air freight & logistics, and railroads take the largest share at 30.8% each, while railroads, trucking and airlines round off the next three spots with a double-digit exposure each.
iShares U.S. Transportation ETF has accumulated $796.1 million in its asset base and sees a solid trading volume of around 165,000 shares a day. It charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: 4 ETFs to Tap on Solid Q4 GDP Numbers).
SPDR S&P Transportation ETF (XTN - Free Report)
SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 49 stocks in its basket. The in-focus firms account for around 2% share each. About 41% of the portfolio is dominated by trucking, while airlines, and air freight & logistics take 26.1% and 18.2% share, respectively.
With AUM of $254.6 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and trades in a volume of around 100,000 shares a day. It has a Zacks ETF Rank #3 with a High risk outlook.
First Trust Nasdaq Transportation ETF (FTXR - Free Report)
First Trust Nasdaq Transportation ETF offers exposure to the 30 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. The in-focus six firms represent a combined 21.8% share. Railroads, airlines, trucking, and automobiles are the top sectors accounting for a double-digit exposure each.
First Trust Nasdaq Transportation ETF has amassed $63 million in its asset base and charges 60 bps in annual fees. The average trading volume is good at 15,000 shares. FTXR has a Zacks ETF Rank #3.