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ZTO Express (ZTO) Q4 Earnings Top, Increase Year Over Year

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ZTO Express’ (ZTO - Free Report) fourth-quarter 2022 earnings (excluding 1 cent from non-recurring items) of 37 cents per share beat the Zacks Consensus Estimate of 35 cents. The bottom line increased 8.8% year over year despite higher operating expenses.

Total revenues of $1,431.2 million also beat the Zacks Consensus Estimate of $1,340.9 million but decreased 1.1% year over year, despite the increase in parcel volumes.

Revenues in Express delivery services increased 8.8% year over year. The uptick was driven by an increase of 3.9% in parcel volume and 4.7% in parcel unit price. Market share of  parcel volume improved 1.5 points to 22.1% in 2022.

Freight forwarding services’ revenues declined 32.8% year over year. However, cross-border e-commerce demand and pricing are returning to normal following COVID-19 recovery. Revenues from sales of accessories climbed 14.8% year over year.

Total operating expenses of this China-based company increased almost 6% year over year. Selling, general and administrative expenses increased 18.8% on the back of a rise in employees' compensation and benefits. Gross margin rate improved to 28.1 % from 24.4 % in the year-ago period.

ZTO Express exited 2022 with cash and cash equivalents of RMB 11.69 billion compared with RMB 9.72 billion at the end of 2021. As of Dec 31, 2022, ZTO purchased an aggregate of 36,560,249 ADSs at an average price of US$25.20, including repurchase commissions.

ZTO Express’ management expects parcel volumes in 2023 to be in the 28.78 - 29.75 billion range, implying growth of 18-22% year over year. Management anticipates to achieve an increase in its market share of at least 1.5 percentage point for 2023.

Currently, ZTO Express carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Q4 Results of Some Other Transportation Players: A Sneak Peek

Delta Air Lines’ (DAL - Free Report) fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents a year ago, dull in comparison with the current scenario, as air-travel demand was not so buoyant then.

Delta reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.

United Airlines (UAL - Free Report) reported fourth-quarter 2022 earnings of $2.46 per share, which beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL had incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario.

Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year due to upbeat air-travel demand.

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