The Q4 earnings season is in full swing with the quarterly numbers of several companies already on board. The picture to have emerged so far seems to be an extremely impressive one, making us hopeful of earnings growth (on a year-over-year basis) for the second consecutive quarter after five consecutive quarters of bottom-line contraction.
According to our Earnings Preview report, quarterly numbers from 170 S&P 500 players (representing 46.3% in terms of market capitalization) are available so far. Going by the available reports, total earnings have grown 6% with the top line expanding 3.1%. So far, 13 of the 16 Zacks sectors have exhibited earnings growth in Q4. However, the highly-diversified transportation sector has been lagging behind in Q4 with its bottom line contracting 23.3% due to multiple headwinds like increasing labor costs. In fact, we have already seen players like United Continental Holdings UAL and Kansas City Southern KSU reporting significant year-over-year bottom-line decline in Q4.
While the sector is projected to end Q4 with bottom-line contraction of 18%, the top line in the transportation space is projected to increase 4.6%. The entire S&P 500 Index is predicted to end the current reporting cycle with the top line and the bottom line expanding 4% and 5.2%, respectively.
As many as 413 companies, including 106 S&P 500 players, are scheduled to report their financial numbers by the end of this week. Investors interested in the transportation sector will keenly await releases from some key sector participants like United Parcel Service, Inc.UPS , C.H. Robinson Worldwide, Inc.CHRW and Allegiant Travel CompanyALGT on Jan 31.
United Parcel Service is the world's largest express carrier and package delivery company. The company provides specialized transportation and logistics services in the United States and internationally. According to our quantitative model, a company needs the right combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase the odds of an earnings surprise. United Parcel has an Earnings ESP of 0.00% and a Zacks Rank #3. The combination makes an earnings beat unlikely for Q4 (Read more: United Parcel Service Q4 Earnings: What's in Store? ).
United Parcel Service, Inc. Price and EPS Surprise
Based in Minnesota, C.H. Robinson Worldwide is a third-party logistics company. Our quantitative model hints at an earnings beat for this Zacks Rank #3 company as it has an Earnings ESP of +2.38 (the Most Accurate estimate of 86 cents is 2 cents higher than the Zacks Consensus Estimate) in addition to the favorable Zacks Rank. (read more: Will C.H. Robinson Q4 Earnings Please Investors? )
C.H. Robinson Worldwide, Inc. Price and EPS Surprise
Allegiant Travel Company focuses on linking travelers in small cities to world-class leisure destinations. Our quantitative model hints at an earnings beat for this Las Vegas, NV-based company as it has a Zacks Rank #3 and an Earnings ESP of +0.83 (the Most Accurate estimate of $2.42 is 2 cents higher than the Zacks Consensus Estimate) (read more: Allegiant Travel Q4 Earnings: Is a Beat in Store? ). You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
Allegiant Travel Company Price and EPS Surprise
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