The Q3 earnings season is in its last leg with most companies already having reported their financial results. Notably, this is the first earnings cycle to display positive trends in the economy after almost five quarters. Although lower estimates remain a concern, the improvement in earnings figures raises optimism. Per the recent Earnings Previewarticle, 84.6% of the S&P 500 members or 423 companies have already reported their quarterly numbers. Earnings are up 3.6%, while revenues have improved 2.4% for these companies on a year-over-year basis.
Transportation Stocks’ Earnings Performance
Transportation sector is one of the Zacks sectors that are expected to underperform this time around. The sector is lagging behind on the earnings front in Q3. With 93.3% of the transportation companies having reported their quarterly numbers as of Nov 4, we observe a 13.7% year-over-year decline in the bottom line. Given that most results from this space are already out, there is little scope for turnaround in this sector in Q3. Nonetheless, we note a 1.3% improvement in revenues on a year-over-year basis, in line with the trend being observed across the index. Although 71.4% of the companies beat earnings estimates and 92.9% surpassed revenue expectations in the quarter, outlook for the transportation sector is not very encouraging as earnings are expected to be down by 13.5% from the prior-year quarter.
In view of the aforesaid factors, let’s take a look at three transportation stocks that are scheduled to report their quarterly results on Nov 8.
Expeditors International of Washington (EXPD - Free Report) provides logistic services globally. This Zacks Rank #4 (Sell) company has an Earnings ESP of -1.54% as the Most Accurate Estimate stands at 64 cents while the Zacks Consensus Estimate is pegged at 65 cents. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises. Please note we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions (Read More Expeditors Q3 Earnings: Disappointment in Store?).
Textainer Group Holdings Limited ((TGH - Free Report) ) is a leading lessor of intermodal containers and leases to the top container lines globally. The company carries a Zacks Rank #4 and an Earnings ESP of more than -100%. We note that the Most Accurate estimate stands at a loss of 26 cents while the Zacks Consensus Estimate is pegged at a loss of 3 cents. This combination renders our surprise prediction inconclusive.
Danaos Corporation ((DAC - Free Report) ) owns and charters vessels to prominent liner companies. The company carries a Zacks Rank #3 (Hold) but has an Earnings ESP of 0.00%. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 – to increase the odds of an earnings surprise. The company’s 0.00% ESP complicates our surprise prediction in spite of its favorable Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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