Markets

Can Expeditors (EXPD) Pull a Surprise this Earnings Season?

Expeditors International of WashingtonEXPD is scheduled to report fourth-quarter results on Feb 21.

Expeditors has a mixed track record with respect earnings. The company missed the Zacks Consensus Estimate in two of the last four quarters and beat the same in the other two. It had a negative earnings surprise of 9.23% in the last quarter.

Earnings Whispers

Our proven model does not conclusively show that Expeditors is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: Expeditors has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 59 cents.

Zacks Rank: Expeditors has a Zacks Rank #3. However, this alone is not sufficient to secure an earnings beat.You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter .

Please note that we caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Price Performance

The recent struggles of Expeditors are well reflected in its stock price movement in the last one month. During that period, the stock has underperformed the Transportation-Services industry. The stock has gained 3.87% compared with the industry's increase of 7.42% in the period.

Factors Likely at Play

We expect Expeditors' fourth-quarter results to be hurt by soft air freight and ocean freight revenues owing to the slowdown in global trade. Pricing woes are also likely to affect airfreight services revenues.

Airfreight services are the largest contributor to the company's top line. The airfreight market is expected to remain challenged going forward due to overcapacity woes. We are also concerned about the impact of adverse foreign exchange movement on the company's performance.

However, the company's strong balance sheet and its asset light business model raise optimism. We are also impressed with the company's policy of awarding shareholders through dividends and share buybacks.

Stocks to Consider

Here are some companies that investors might consider as they have the right combination of elements to post an earnings beat this quarter.

LATAM Airlines Group S.A. LFL has an Earnings ESP of +81.82% and a Zacks Rank #2. The company, which is scheduled to release fourth-quarter results on Mar 16, has outpaced the Zacks Consensus Estimate in two of the last four quarters.You can see the complete list of today's Zacks #1 Rank stocks here .

Navigator Holdings Ltd. ( NVGS ) has an Earnings ESP of +75% and a Zacks Rank #3. The company, which is expected to release its fourth-quarter results on Mar 6, has surpassed the Zacks Consensus Estimate in two of the last four quarters.

Pinnacle Entertainment, Inc . PNK has an Earnings ESP of +57.14% and a Zacks Rank #3. The company is set to release its fourth-quarter 2016 results on Feb 22.

Just Released - Driverless Cars: Your Roadmap to Mega-Profits Today

In this latest Special Report, Zacks' Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making - autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

LATAM Airlines Group S.A. (LFL): Free Stock Analysis Report

Expeditors International of Washington, Inc. (EXPD): Free Stock Analysis Report

Pinnacle Entertainment, Inc. (PNK): Free Stock Analysis Report

Navigator Holdings Ltd. (NVGS): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

NVGS EXPD

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More