Transport Stock Q1 Earnings on Apr 25: JBLU, ALGT & More

The Q1 Earnings season has picked up pace with 95 S&P 500 companies , representing 24.9% of the index’s total market capitalization, having already revealed their quarterly numbers. According to our latest Earnings Preview report, the performance so far is extremely encouraging with the earnings and revenues expanding 14.3% and 4.6%, respectively, on a year-over-year basis.

While 72.6% companies have outpaced the Zacks Consensus Estimate with respect to earnings, 62.1% beat expectations on the revenue front. In fact, 51.6% of the companies in the S& P 500 space outperformed both with respect to earnings and revenues. We will get a clearer picture by the end of the current week, which will see nearly 800 companies reporting their respective results, including 191 players in the S&P 500 space.

The report predicts that the bottom and top lines (in the S&P 500 Index) expand 9.1% and 6%, respectively, at the end of the Q1 earnings season. Both figures compared favorably to the readings in Q4, when bottom line expanded 7.4% (highest growth in almost two years) and revenues grew 4.7%.

Nevertheless, the transportation sector (one of the 16 Zacks sectors) does not share the rosy picture. The bottom line for the S&P 500 companies in this highly-diversified sector is projected to contract 20%, due to higher costs. In fact, this reading compares unfavorably to the segmental bottom-line contraction of 18.2% in Q4.

In fact, 40% of the sector participants have revealed their quarterly reports so far with earnings contracting 25.6% year over year (the worst performance among the Zacks sectors). For example, Q1 earnings at Delta Air Lines DAL contracted 41.7% on a year-over-year basis due to higher costs. At United Continental Holdings UAL, the bottom line contracted 66.7% year over year.

Given this backdrop, investors interested in the transportation space will keenly await earnings reports from players like JetBlue Airways Corporation JBLU, Allegiant Travel Company ALGT, C.H. Robinson Worldwide Inc. CHRW and Ryder System Inc. R on Apr 25.

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 Long Island City, NY-based JetBlue Airways focuses on providing high-quality customer service. The chances of this low-cost carrier beating the Zacks Consensus Estimate in Q1 are less, as it currently has an Earnings ESP of -4.17% (Most Accurate estimate is 1 cent below the Zacks Consensus Estimate of 24 cents) and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Our model did not predict an earnings beat earlier either. When we issued its Q1 earnings preview article, the company had an earnings ESP of -12.00% while the Zacks Rank remained the same. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

JetBlue Airways Corporation Price and EPS Surprise

 

JetBlue Airways Corporation Price and EPS Surprise | JetBlue Airways Corporation Quote

Based in Las Vegas Allegiant Travel Company is the parent company of Allegiant Air. This low-cost Allegiant Air offers air travel both on a stand-alone basis and bundled with hotel rooms, rental cars and other travel-related services. The chances of the company beating the Zacks Consensus Estimate in Q1 are less, as it currently has an Earnings ESP of 0.00% (Most Accurate estimate is in line with the Zacks Consensus Estimate of $2.58) and carries a Zacks Rank #3.

Our model did not predict an earnings beat earlier either. When we issued its Q1 earnings preview article, the company had an earnings ESP of -2.27% while the Zacks Rank remained the same.

Allegiant Travel Company Price and EPS Surprise

 

Allegiant Travel Company Price and EPS Surprise | Allegiant Travel Company Quote

Next, is a third-party logistics company C.H. Robinson Worldwide, which is based in Minnesota. Our quantitative model hints at an earnings beat for this Zacks Rank #3 company in Q1. This is because it has an Earnings ESP of +2.50 (the Most Accurate estimate of 82 cents is 2 cents higher than the Zacks Consensus Estimate) in addition to the favorable Zacks Rank (Read more: Is a Beat in Store for C.H. Robinson in Q1 Earnings?).

C.H. Robinson Worldwide, Inc. Price and EPS Surprise

 

C.H. Robinson Worldwide, Inc. Price and EPS Surprise | C.H. Robinson Worldwide, Inc. Quote

Finally, Ryder System, Inc., a Florida-based corporation founded in 1933, is recognized as one of the world's largest providers of integrated logistics and transportation solutions. The chances of this company beating the Zacks Consensus Estimate in Q1 are less, despite its Zacks Rank #3. This is because it has an Earnings ESP of -1.19% as the Most Accurate estimate is lower than the Zacks Consensus Estimate of 84 cents per share by a penny (Read more: What's in the Cards for Ryder System in Q1 Earnings?).

Ryder System, Inc. Price and EPS Surprise

 

Ryder System, Inc. Price and EPS Surprise | Ryder System, Inc. Quote

 

Zacks' 2017 IPO Watch List

Before looking into the stocks mentioned above, you may want to get a head start on potential tech IPOs that are popping up on Zacks' radar. Imagine being in the first wave of investors to jump on a company with almost unlimited growth potential? This Special Report gives you the current scoop on 5 that may go public at any time.

One has driven from 0 to a $68 billion valuation in 8 years. Four others are a little less obvious but already show jaw-dropping growth. Download this IPO Watch List today for free >>

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
 
JetBlue Airways Corporation (JBLU): Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
 
United Continental Holdings, Inc. (UAL): Free Stock Analysis Report
 
Allegiant Travel Company (ALGT): Free Stock Analysis Report
 
Ryder System, Inc. (R): Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
 
To read this article on Zacks.com click here.