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Watch These 4 Transportation Stocks for Q2 Earnings: Beat or Miss?
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Key Takeaways
WAB and UNP show positive Earnings ESP and solid Zacks Ranks, signaling likely Q2 earnings beat.
LUV and AAL face soft travel demand, rising labor costs, and mixed revenue outlooks, clouding Q2 results.
Sector challenges such as freight slowdown, inflation, and geopolitical risks persist amid lower fuel prices.
The widely diversified Zacks Transportation sector is currently navigating a challenging macroeconomic environment. The sector grapples with multiple headwinds, ranging from escalated expenses, inflation-induced elevated interest rates, a downturn in freight demand and supply-chain woes. Geopolitical uncertainties and tariff-induced economic tensions continue to hurt consumer sentiment and growth expectations.
With inflation remaining a concern, risks associated with an economic slowdown and geopolitical tensions dampen the prospects of stocks belonging to this sector. Sluggish economic growth and inflationary woes are likely to make markets more volatile in the coming days. Due to supply-chain troubles, costs will likely continue to be steep going forward.
On a brighter note, the southward movement of oil prices bodes well for the bottom-line growth of sector participants. This is because fuel expenses are a significant input cost for the transportation companies. Crude oil is struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence, and the production increase by OPEC+ have all contributed to this downward pressure. Oil prices decreased by 6% in the April-June 2025 period and by almost 10% from the beginning of 2025 to date.
Given this backdrop, investors interested in the Zacks Transportation sector are keenly waiting for the results of Westinghouse Air Brake Technologies (WAB - Free Report) ), Union Pacific Corporation (UNP - Free Report) ), Southwest Airlines Co. (LUV - Free Report) and American Airlines Group Inc. (AAL - Free Report) – all of which are slated to be released on July 24, 2025.
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.
Let’s delve deeper.
Wabtec
The Zacks Consensus Estimate for WAB’s second-quarter 2025 earnings has been revised upward by 0.46% in the past 60 days to $2.18 per share. Moreover, the consensus mark implies an 11.22% upside from the year-ago actual. The bottom-line performance is likely to have been aided by higher sales and operating margin expansion.
Notably, the Zacks Consensus Estimate for WAB’s second-quarter revenues is pegged at $2.77 billion, which indicates growth of 4.84% from the year-ago levels. The top line is likely to reflect strength across the Freight and Transit segments.
The Zacks Consensus Estimate for UNP’s second-quarter 2025 earnings has been revised 1.76% upward in the past 60 days and is pegged at $2.89 per share. Additionally, the consensus mark implies a 5.47% uptick from the year-ago actual. The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $6.11 billion, indicating a 1.7% upside from the year-ago actual.
UNP’s efforts to cut costs to combat revenue woes are expected to have aided bottom-line performance in the quarter to be reported. Due to cost cuts and improved operational efficiency, we expect operating expenses to decline in the second quarter of 2025 from the year-ago actuals. On the flip side, woes of the freight market downturn and a soft consumer market are likely to have weighed on UNP’s performance in the to-be-reported period.
Our proven model predicts an earnings beat for Union Pacific this time around, as UNP has an Earnings ESP of +0.50% and a Zacks Rank #3 at present.
We expect geopolitical uncertainty, tariff-related pressures, and persistent inflation to weigh on LUV’s operations and weaken travel demand. The ongoing economic uncertainties and the resultant reduction in consumer and corporate confidence are likely to have hurt the domestic air travel demand. Escalated labor and airport costs are also likely to have been high, which is likely to have hurt the company’s bottom-line performance in the June quarter, despite costs on aircraft fuel decreasing year over year.
The Zacks Consensus Estimate for LUV’s second-quarter 2025 earnings has been revised downward by 1.92% in the past 60 days to 51 cents per share. Moreover, the consensus mark implies a 12.07% downside from the year-ago actual. The Zacks Consensus Estimate for LUV’s second-quarter 2025 revenues is pegged at $7.30 billion, indicating a 0.8% decline year over year.
Our proven model does not conclusively predict an earnings beat for LUV, as LUV has an Earnings ESP of -4.39% and a Zacks Rank #3 at present.
The Zacks Consensus Estimate for AAL’s second-quarter 2025 earnings has been revised upward by 2.60% in the past 60 days to 79 cents per share. However, the consensus mark implies a 27.52% downside from the year-ago actual. The consensus estimate lies within the company-provided guided range of 50 cents-$1.00.
For the second quarter of 2025, management expects total revenues to be down 2% to up 1% from the second quarter of 2024 actuals. The Zacks Consensus Estimate for AAL’s second-quarter 2025 revenues is pegged at $14.29 billion, indicating a 0.3% decline year over year. The downside is likely to have been partially offset by improving travel demand and lower fuel prices.
Our proven model does not conclusively predict an earnings beat for American Airlines this time around, as AAL has an Earnings ESP of -0.18% and a Zacks Rank #3 at present.
American Airlines Group Inc. Price and EPS Surprise
Image: Bigstock
Watch These 4 Transportation Stocks for Q2 Earnings: Beat or Miss?
Key Takeaways
The widely diversified Zacks Transportation sector is currently navigating a challenging macroeconomic environment. The sector grapples with multiple headwinds, ranging from escalated expenses, inflation-induced elevated interest rates, a downturn in freight demand and supply-chain woes. Geopolitical uncertainties and tariff-induced economic tensions continue to hurt consumer sentiment and growth expectations.
With inflation remaining a concern, risks associated with an economic slowdown and geopolitical tensions dampen the prospects of stocks belonging to this sector. Sluggish economic growth and inflationary woes are likely to make markets more volatile in the coming days. Due to supply-chain troubles, costs will likely continue to be steep going forward.
On a brighter note, the southward movement of oil prices bodes well for the bottom-line growth of sector participants. This is because fuel expenses are a significant input cost for the transportation companies. Crude oil is struggling in 2025, with prices sliding to multi-month lows. Tariff concerns, weakening consumer confidence, and the production increase by OPEC+ have all contributed to this downward pressure. Oil prices decreased by 6% in the April-June 2025 period and by almost 10% from the beginning of 2025 to date.
Given this backdrop, investors interested in the Zacks Transportation sector are keenly waiting for the results of Westinghouse Air Brake Technologies (WAB - Free Report) ), Union Pacific Corporation (UNP - Free Report) ), Southwest Airlines Co. (LUV - Free Report) and American Airlines Group Inc. (AAL - Free Report) – all of which are slated to be released on July 24, 2025.
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.
Let’s delve deeper.
Wabtec
The Zacks Consensus Estimate for WAB’s second-quarter 2025 earnings has been revised upward by 0.46% in the past 60 days to $2.18 per share. Moreover, the consensus mark implies an 11.22% upside from the year-ago actual. The bottom-line performance is likely to have been aided by higher sales and operating margin expansion.
Notably, the Zacks Consensus Estimate for WAB’s second-quarter revenues is pegged at $2.77 billion, which indicates growth of 4.84% from the year-ago levels. The top line is likely to reflect strength across the Freight and Transit segments.
Our proven model predicts an earnings beat for Wabtec this time around, as it has an Earnings ESP of +0.50% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wabtec Price and EPS Surprise
Wabtec price-eps-surprise | Wabtec Quote
Union Pacific Corporation
The Zacks Consensus Estimate for UNP’s second-quarter 2025 earnings has been revised 1.76% upward in the past 60 days and is pegged at $2.89 per share. Additionally, the consensus mark implies a 5.47% uptick from the year-ago actual. The Zacks Consensus Estimate for second-quarter 2025 revenues is pegged at $6.11 billion, indicating a 1.7% upside from the year-ago actual.
UNP’s efforts to cut costs to combat revenue woes are expected to have aided bottom-line performance in the quarter to be reported. Due to cost cuts and improved operational efficiency, we expect operating expenses to decline in the second quarter of 2025 from the year-ago actuals. On the flip side, woes of the freight market downturn and a soft consumer market are likely to have weighed on UNP’s performance in the to-be-reported period.
Our proven model predicts an earnings beat for Union Pacific this time around, as UNP has an Earnings ESP of +0.50% and a Zacks Rank #3 at present.
Union Pacific Corporation Price and EPS Surprise
Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote
Southwest Airlines
We expect geopolitical uncertainty, tariff-related pressures, and persistent inflation to weigh on LUV’s operations and weaken travel demand. The ongoing economic uncertainties and the resultant reduction in consumer and corporate confidence are likely to have hurt the domestic air travel demand. Escalated labor and airport costs are also likely to have been high, which is likely to have hurt the company’s bottom-line performance in the June quarter, despite costs on aircraft fuel decreasing year over year.
The Zacks Consensus Estimate for LUV’s second-quarter 2025 earnings has been revised downward by 1.92% in the past 60 days to 51 cents per share. Moreover, the consensus mark implies a 12.07% downside from the year-ago actual. The Zacks Consensus Estimate for LUV’s second-quarter 2025 revenues is pegged at $7.30 billion, indicating a 0.8% decline year over year.
Our proven model does not conclusively predict an earnings beat for LUV, as LUV has an Earnings ESP of -4.39% and a Zacks Rank #3 at present.
Southwest Airlines Co. Price and EPS Surprise
Southwest Airlines Co. price-eps-surprise | Southwest Airlines Co. Quote
American Airlines
The Zacks Consensus Estimate for AAL’s second-quarter 2025 earnings has been revised upward by 2.60% in the past 60 days to 79 cents per share. However, the consensus mark implies a 27.52% downside from the year-ago actual. The consensus estimate lies within the company-provided guided range of 50 cents-$1.00.
For the second quarter of 2025, management expects total revenues to be down 2% to up 1% from the second quarter of 2024 actuals. The Zacks Consensus Estimate for AAL’s second-quarter 2025 revenues is pegged at $14.29 billion, indicating a 0.3% decline year over year. The downside is likely to have been partially offset by improving travel demand and lower fuel prices.
Our proven model does not conclusively predict an earnings beat for American Airlines this time around, as AAL has an Earnings ESP of -0.18% and a Zacks Rank #3 at present.
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote