ZTO Express (ZTO) to Post Q3 Earnings: What's in the Offing?
ZTO Express (Cayman) ZTO is scheduled to report third-quarter 2020 earnings on Nov 18, after market close.
The company has a disappointing earnings record, having missed estimates in two of the last four quarters, while surpassing the same on the other two occasions, with the average negative surprise being 12.5%.
Moreover, the Zacks Consensus Estimate for third-quarter earnings has been revised 21.4% downward over the past 90 days.
Let’s dig deeper into the factors that might have impacted this Shanghai-based courier company’s September-quarter performance.
ZTO Express’ performance in the to-be-reported quarter is expected to have been affected by COVID-19-led supply-chain disruptions. Stringent government regulations and tightening policies in the market in China are also expected to have hindered ZTO Express’ business during the quarter-to-be-reported.
Additionally, higher selling, general and administrative expenses are anticipated to have hurt ZTO Express’ third-quarter bottom-line performance.
ZTO Express Cayman Inc. Price and EPS Surprise
ZTO Express Cayman Inc. price-eps-surprise | ZTO Express Cayman Inc. Quote
Meanwhile, the company's express delivery services unit is likely to have performed well in the third quarter on the back of strong parcel volumes.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for ZTO Express this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. But that is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: ZTO Express has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of 22 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: ZTO Express carries a Zacks Rank #5 (Strong Sell), currently.
Highlights of Q2 Earnings
ZTO Express' earnings of 26 cents per share missed the Zacks Consensus Estimate of 28 cents. Nevertheless, the bottom line increased 4% year over year. The results were driven by a rise in parcel volume market share by 1.6 percentage points to 21.5%. Total revenues of $906.2 million also rose 14.7% year over year. The upside can be attributed to an increase in revenues at the core express delivery services unit, which contributed significantly to the top line.
Results of Q3 Sectorial Outperformers
Investors interested in the broader Transportation sector may want to recapitulate third-quarter results of some companies, whose earnings surpassed estimates.
United Parcel Service’s UPS third-quarter 2020 earnings (excluding 4 cents from non-recurring items) per share of $2.28 surpassed the Zacks Consensus Estimate of $1.86. The bottom line also improved 10.1% year over year. UPS — currently carrying a Zacks Rank #2 — generated $21,238 million revenues for the quarter, which outpaced the Zacks Consensus Estimate of $20,079.6 million.
Expeditors International of Washington’s EXPD third-quarter 2020 earnings of $1.12 per share surpassed the Zacks Consensus Estimate of 98 cents and improved 21.7% on a year-over-year basis. The top line not only rose 18.8% year over year to $2,464.8 million but also surpassed the Zacks Consensus Estimate of $2,315.1 million. The stock currently carries a Zacks Rank #2.
Knight-Swift Transportation Holdings Inc.’s KNX third-quarter 2020 earnings (excluding 8 cents from non-recurring items) of 79 cents per share surpassed the Zacks Consensus Estimate of 63 cents. Moreover, the bottom line surged 64.6% year over year. Total revenues of $1,210.4 million beat the Zacks Consensus Estimate of $1,160.9 million and increased marginally year over year driven by increase in revenues in the Trucking and Logistics segment. The stock currently sports a Zacks Rank #1.
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