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Transportation Stock Q4 Earnings Due on Feb 18: EXPD, WAB

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The Zacks Transportation sector is widely diversified in nature. It houses airlines, railroads, shipping and trucking companies to name a few.

The majority of the sector participants already reported their fourth-quarter 2019 financial numbers. Among the S&P 500 members, the likes of Delta Air Lines (DAL - Free Report) , United Airlines (UAL - Free Report) , CSX Corporation (CSX - Free Report) and United Parcel Service (UPS - Free Report) released better-than-expected earnings per share. Factors like impressive passenger revenues, low fuel costs and e-commerce growth aided the results.

Of the S&P fraternity in the transportation space, only two companies, namely Expeditors International of Washington (EXPD - Free Report) and Wabtec Corporation (WAB - Free Report) are yet to announce respective fourth-quarter results, both on Feb 18.

Akin to the last few quarters, Expeditors’ fourth-quarter performance is likely to have been dented by weak shipment volumes. Due to this downside, performance of its major revenue-generating unit, Airfreight Services segment, is likely to have been affected. This, in turn, might have hurt the Seattle, WA-based company’s overall results.

In fact, the company expects fourth-quarter earnings per share to have been in the range of 78-81 cents. The midpoint of this guided range (79.5 cents) is well below the year-ago reported figure of $1.02 per share. Additionally, operating expenses are expected to have escalated in the December quarter, mainly due to higher labor costs, which in turn, might have stressed the bottom line.

Our proven model does not conclusively predict an earnings beat for Expeditors this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. However, Expeditors has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). (Read more: Will Low Volumes Weigh on Expeditors' Q4 Earnings?).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Similar to the last few quarters, Wabtec’s fourth-quarter performance is likely to have been weighed on by high operating expenses. Operating costs are likely to have surged due to steep selling, general and administrative expenses.

Due to high operating expenses, operating ratio (operating expenses as a percentage of revenues) — a key measure of efficiency — is likely to have deteriorated in the quarter to be reported. Notably, lower the value of this ratio the better. However, revenues in the to-be-reported quarter are likely to have benefited from the expanded product portfolio following the merger with GE Transportation.

Our proven model does not conclusively predict an earnings beat for Wabtec this time around. This is because the company has an Earnings ESP of 0.00% and a Zacks Rank of 4. (Read more : What's in the Offing for Wabtec Stock in Q4 Earnings? ).

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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