Markets

Transport Stocks to Watch for Earnings on Feb 8: GWR, FWRD

The ongoing Q4 earnings season might be the second successive quarter to witness year-over-year bottom-line expansion. According to our latest Earnings Preview report, total earnings for the 275 S&P 500 companies to have reported (as of Feb 3) have grown at 6.9%, whereas the top line for these companies have expanded 4.2%.The report further states that 68% of these companies have reported better-than-expected earnings, whereas 54.5% have surpassed expectations on the revenue front.

In fact, companies in the S&P 500 space are projected to end Q4 on a healthier note than Q3. The top and bottom lines are projected to expand at 3.9% and 6.8%, respectively in Q4. Both readings are favorable than the Q3 numbers of 2.2% and 3.7%, respectively. We will get a clearer picture regarding the Q4 earnings season by the end of the current week, as by then reports from 359 S&P companies will be on board.

With the overall picture so optimistic, it is of little wonder that currently 13 of the 16 Zacks sectors are exhibiting earnings growth. Unfortunately, the widely-diversified transportation sector does not share the same conditions.

As of Feb 3, 2017, 86.7% of the transportation S&P 500 companies (accounting for 95.6% in terms of market capitalization) unveiled their latest quarterly numbers. The bottom line for these companies have declined 18.9%. In fact, we have already seen players like United Continental Holdings UAL , Ryder System R and Kansas City Southern KSU reporting significant year-over-year bottom-line decline in the Q4.

Increasing labor costs have hurt the bottom line for most of the sector participants, particularly airlines. Nonetheless, the picture with respect to revenues is much better for the sector, having expanded 5.2%.

Given this backdrop, investors interested in the transportation space will keenly await the Q4 reports from key sector participants like Genesee & Wyoming Inc.GWR and Forward Air CorporationFWRD scheduled for Feb 8.

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

Genesee & Wyoming Inc. is engaged in operation of short line and freight railroads. The company carries a Zacks Rank #3 and an Earnings ESP of +1.14% (Most Accurate estimate stands at 89 cents while the Zacks Consensus Estimate is pegged a penny lower), which makes us reasonably confident of an earnings beat. You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks here .

Genesee & Wyoming, Inc. Price and EPS Surprise

Genesee & Wyoming, Inc. Price and EPS Surprise | Genesee & Wyoming, Inc. Quote

Forward Air Corporation , based in Greeneville, TN, is not likely to beat the Zacks Consensus Estimate for earnings in Q4. The company has an Earnings ESP of 0.00% as the Most Accurate estimate is in line with the Zacks Consensus Estimate of 55 cents per share. The company carries a Zacks Rank #4 (Sell).

Please note that we caution against Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement.

Forward Air Corporation Price and EPS Surprise

Forward Air Corporation Price and EPS Surprise | Forward Air Corporation Quote

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

Ryder System, Inc. (R): Free Stock Analysis Report

Kansas City Southern (KSU): Free Stock Analysis Report

Genesee & Wyoming, Inc. (GWR): Free Stock Analysis Report

Forward Air Corporation (FWRD): Free Stock Analysis Report

United Continental Holdings, Inc. (UAL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

FWRD R UAL

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