Transportation Stocks' Apr 21 Q1 Earnings Roster: AAL, ALK & UNP
The Zacks Transportation sector is widely diversified. It houses airlines, railroads, shipping and trucking companies, to name a few.
Only a handful of transportation companies (two S&P 500 members, to be exact) have reported their first-quarter 2022 numbers so far, with a vast majority yet to do so. Notably, the early indications are encouraging.
The gradual uptick in the economic scenario implies that trading volumes have been rising. This bodes well for the entire sector. The latest Earnings Preview indicates that the total earnings of transportation companies belonging to the S&P 500 universe in first-quarter 2022 will increase massively from the fourth-quarter 2021 reported levels mainly on the uptick in economic activities. Administered with jabs, people are now more confident of going out and resuming their daily activities.
The above-mentioned scenario is projected to have favorably impacted the first-quarter 2022 performances of American Airlines AAL, Alaska Air Group ALK and Union Pacific Corporation UNP, scheduled to release their results on Apr 21. However, high fuel costs are likely to have hurt their bottom-line performances. Notably, oil prices escalated 33% in first-quarter 2022, induced by the Russia-Ukraine war.
Our quantitative model predicts an earnings beat for a company if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This combination increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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Let’s delve deeper.
American Airlines’ results are likely to reflect the impacts of upbeat passenger revenues, courtesy of strong air-travel demand. Management expects first-quarter 2022 revenues to decline 16% approximately in first-quarter 2022 from the 2019 comparable period’s reported level. This is better than AAL’s previous view of a 17% decrease.
However, due to the Russia-Ukraine war, fuel prices have been soaring. AAL estimates fuel costs per gallon of $2.80-$2.85 for the first quarter compared with $2.73-$2.78 stated previously.
Our proven model predicts an earnings beat for American Airlines this season as AAL has an Earnings ESP of +3.01% and a Zacks Rank #3 at present. Notably, our model had predicted a positive surprise for AAL earlier as well, when its first-quarter earnings preview article was issued. At that time, AAL had an Earnings ESP of +1.54 and the Zacks Rank was the same.
American Airlines Group Inc. Price and EPS Surprise
American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote
High fuel costs are likely to have dented Alaska Air’s first-quarter performance despite increasing passenger revenues due to strong air-travel demand. The carrier expects first-quarter economic fuel costs of $2.62 per gallon, suggesting a rise from the $2.26 per gallon reported in fourth-quarter 2021.
Our proven model does not predict a bottom-line outperformance for Alaska Air this season as ALK has an Earnings ESP of -0.30% and a Zacks Rank #3 at present. Notably, our model did not predict a positive surprise for ALK earlier as well, when its first-quarter earnings preview article was issued.
Alaska Air Group, Inc. Price, Consensus and EPS Surprise
Alaska Air Group, Inc. price-consensus-eps-surprise-chart | Alaska Air Group, Inc. Quote
Strong freight demand is expected to have boosted Union Pacific’s freight revenues in the first quarter. Higher volumes and favorable pricing are likely to have aided Union Pacific’s performance.
Our proven model does not predict a beat for Union Pacific this earnings season as UNP has an Earnings ESP of -0.15% and a Zacks Rank #3 at present. However, our model had predicted a positive surprise for UNP earlier when its first-quarter earnings preview article was issued.
Union Pacific Corporation Price and EPS Surprise
Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote
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