The Q3 earnings season is drawing to a close with only a few companies remaining to report their financial numbers. This earnings cycle has been favorable for the majority of the 16 Zacks sectors and the overall picture is quite encouraging. According to our latest Earnings Preview report, this will likely be the first quarter to display earnings growth after five consecutive quarters of bottom-line deceleration.
The report also predicts that the S&P 500 Index will end the quarter with 3% year-over-year growth in the bottom line. Revenues, on the other hand, are projected to grow 1.5%. In fact, 12 sectors are projected to end the quarter with bottom-line improvement.
The transportation sector, unfortunately, is among the four sectors that are expected to end the current earnings cycle with earnings contraction. The oil/energy sector is likely to be the worst performer yet again with a 63.5% plunge in the bottom line on a year-over-year basis.
The transportation sector continues to face multiple headwinds like declining demand for travel due to security fears, soft coal shipments, labor strife, and technological glitches to name a few. The beleaguered sector is projected to end Q3 with bottom-line decrease of 13.5%. The dismal performances of key players like Expeditors International of Washington Inc. EXPD and Canadian Pacific CP added to the bearishness.
Given this bleak backdrop, investors interested in this space will look forward to reports from key sector players like Triton International Ltd. TRTN and Nordic American Tankers Limited NAT on Nov 10, to find out whether these companies can offer a glimmer of hope for the sector.
Triton International Limited was formed in Jul 2016 following the merger of Triton Container International Limited and TAL International Group. The company is a lessor of intermodal containers and chassis. 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. The company has an Earnings ESP of -50.00% as the Most Accurate estimate is 9 cents below the Zacks Consensus Estimate of 18 cents. The negative Earnings ESP complicates matters and makes surprise prediction difficult for the company despite its favorable Zacks Rank #3.
TRITON INTL LTD Price and EPS Surprise
Our quantitative model does not conclusively indicate an earnings beat for Hamilton, Bermuda-based company Nordic American Tankers Limited either. The Earnings ESP for Nordic American Tankers is 0.00% as the Most Accurate estimate is in line with the Zacks Consensus Estimate. The company has a Zacks Rank #4 (Sell). Please note that we caution against Sell-rated stocks (Zacks Rank #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
NORDIC AMERICAN Price and EPS Surprise
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