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The first-quarter earnings picture for the transportation sector has been unimpressive. This is especially true as earnings of 97% of the market capitalization of the sector are down 5.4% on 1.6% revenue growth. The earnings and revenue beat ratios came in at 69.2% and 38.5%, respectively.
As such, transportation ETFs have seen rough trading over the past month. iShares U.S. Transportation ETF (IYT - Free Report) , First Trust Nasdaq Transportation ETF (FTXR - Free Report) and SPDR S&P Transportation ETF (XTN - Free Report) have lost 6.2%, 7% and 3.9%, respectively.
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 but lagged the same for revenues. Earnings of $1.43 per share were 10 cents ahead of the consensus mark but revenues of $21.71 billion came in below the estimated $21.96 billion. For 2024, UPS reaffirmed revenues in the range of $92-$94.5 billion (see: all the Industrials ETFs here).
Major railroad company Union Pacific (UNP - Free Report) reported better-than-expected results, while Norfolk Southern Corp (NSC - Free Report) missed estimates on both fronts. Union Pacific topped the consensus estimate for earnings by 19 cents and the revenue estimate by $29 million. Norfolk lagged the earnings estimate by 9 cents and the revenue estimate by $26 million.
U.S. airlines Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) reported better-than-expected results. Delta reported earnings per share of 45 cents, outpacing the Zacks Consensus Estimate of 36 cents. Revenues of $13.75 billion also edged past the consensus mark of $12.84 billion. United Airlines reported a loss of 15 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 53 cents. Revenues of $12.54 billion came in above the estimated $12.43 billion.
Last but not least, leading trucking carrier J.B. Hunt (JBHT - Free Report) missed estimates for earnings by 31 cents per share and for revenues by $173 million.
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 43 securities. The six in-focus firms make up a combined 42.6% share. From a sector perspective, rail transportation and air freight & logistics take the largest share at 26.4% and 20.6%, respectively, while passenger ground transportation, cargo ground transportation and passenger airlines round off the next three spots with double-digit exposure each.
SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 43 stocks in its basket. The in-focus firms account for at least 2% share each. About 29% of the portfolio is dominated by cargo ground transportation, while passenger airlines and air freight & logistics round off the next two with double-digit exposure each.
With AUM of $166.1 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and has a Zacks ETF Rank #2 with a High risk outlook.
First Trust Nasdaq Transportation ETF offers exposure to the 41 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 25.6% share. Automobiles, airlines, delivery services, and railroads are the top sectors, accounting for double-digit exposure each.
First Trust Nasdaq Transportation ETF has amassed $37.9 million in its asset base and charges 60 bps in annual fees. FTXR has a Zacks ETF Rank #2.
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Weak Q1 Earnings Push Transport ETFs Down
The first-quarter earnings picture for the transportation sector has been unimpressive. This is especially true as earnings of 97% of the market capitalization of the sector are down 5.4% on 1.6% revenue growth. The earnings and revenue beat ratios came in at 69.2% and 38.5%, respectively.
As such, transportation ETFs have seen rough trading over the past month. iShares U.S. Transportation ETF (IYT - Free Report) , First Trust Nasdaq Transportation ETF (FTXR - Free Report) and SPDR S&P Transportation ETF (XTN - Free Report) have lost 6.2%, 7% and 3.9%, respectively.
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 but lagged the same for revenues. Earnings of $1.43 per share were 10 cents ahead of the consensus mark but revenues of $21.71 billion came in below the estimated $21.96 billion. For 2024, UPS reaffirmed revenues in the range of $92-$94.5 billion (see: all the Industrials ETFs here).
Major railroad company Union Pacific (UNP - Free Report) reported better-than-expected results, while Norfolk Southern Corp (NSC - Free Report) missed estimates on both fronts. Union Pacific topped the consensus estimate for earnings by 19 cents and the revenue estimate by $29 million. Norfolk lagged the earnings estimate by 9 cents and the revenue estimate by $26 million.
U.S. airlines Delta Air Lines (DAL - Free Report) and United Airlines (UAL - Free Report) reported better-than-expected results. Delta reported earnings per share of 45 cents, outpacing the Zacks Consensus Estimate of 36 cents. Revenues of $13.75 billion also edged past the consensus mark of $12.84 billion. United Airlines reported a loss of 15 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 53 cents. Revenues of $12.54 billion came in above the estimated $12.43 billion.
Last but not least, leading trucking carrier J.B. Hunt (JBHT - Free Report) missed estimates for earnings by 31 cents per share and for revenues by $173 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 43 securities. The six in-focus firms make up a combined 42.6% share. From a sector perspective, rail transportation and air freight & logistics take the largest share at 26.4% and 20.6%, respectively, while passenger ground transportation, cargo ground transportation and passenger airlines round off the next three spots with double-digit exposure each.
iShares U.S. Transportation ETF has accumulated $846.2 million in its asset base and charges 40 bps in annual fees. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 4 Industry ETFs to Play as US Manufacturing Grows in 1.5 Years).
SPDR S&P Transportation ETF (XTN - Free Report)
SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 43 stocks in its basket. The in-focus firms account for at least 2% share each. About 29% of the portfolio is dominated by cargo ground transportation, while passenger airlines and air freight & logistics round off the next two with double-digit exposure each.
With AUM of $166.1 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and has a Zacks ETF Rank #2 with a High risk outlook.
First Trust Nasdaq Transportation ETF (FTXR - Free Report)
First Trust Nasdaq Transportation ETF offers exposure to the 41 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 25.6% share. Automobiles, airlines, delivery services, and railroads are the top sectors, accounting for double-digit exposure each.
First Trust Nasdaq Transportation ETF has amassed $37.9 million in its asset base and charges 60 bps in annual fees. FTXR has a Zacks ETF Rank #2.