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ZTO Express (ZTO) to Post Q4 Earnings: What's in the Cards?

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·4 min read
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ZTO Express ZTO is scheduled to report fourth-quarter 2020 earnings on Mar 17, after market close.

It does not have an impressive earnings surprise history, having missed estimates in two of the last four quarters, while surpassing the same on the other two occasions. The average four-quarter negative surprise is 13.7%.

Markedly, the Zacks Consensus Estimate for fourth-quarter earnings has been revised 16.6% downward over the past 90 days.

Let’s dig deeper into the factors that might have impacted this Shanghai-based courier company’s December-quarter performance.

ZTO Express Cayman Inc. Price and EPS Surprise

ZTO Express Cayman Inc. Price and EPS Surprise
ZTO Express Cayman Inc. Price and EPS Surprise

ZTO Express Cayman Inc. price-eps-surprise | ZTO Express Cayman Inc. Quote

ZTO Express’ higher selling, general and administrative expenses are anticipated to have hurt fourth-quarter bottom-line performance.

Additionally, the company’s performance in the to-be-reported quarter is expected to have been affected by COVID-induced 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.

However, the company's express delivery services unit is likely to have performed well in the fourth 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 an earnings beat. 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 25 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 #4 (Sell), currently.

Highlights of Q3 Earnings

ZTO Express' earnings of 23 cents per share (RMB 1.53) beat the Zacks Consensus Estimate by a penny. However, the bottom line declined year over year due to an 18.4% decrease in parcel unit price as a result of intense competition. Total revenues of $977.8 million (RMB 6,638.8 million) increased in double digits on a year-over-year basis owing to a significant rise in revenues at the core express delivery services unit (which contributed 87.1% to the top line).

Snapshots of Sectorial Releases

Here we take a sneak peek into fourth-quarter 2020 results of some of the stocks in the Zacks Transportation sector.

Triton International Limited’s TRTN fourth-quarter 2020 earnings of $1.70 per share surpassed the Zacks Consensus Estimate of $1.42. Moreover, the bottom line surged 58.9% year over year owing to strong leasing demand and higher sale prices for used containers. Total leasing revenues of $337.3 million missed the Zacks Consensus Estimate of $350.5 million. The metric, however, inched up 1.8% year over year, given a 2.6% rise in revenues from operating leases. Triton presently sports a Zacks Rank #1.

Expeditors International of Washington’s EXPD fourth-quarter 2020 earnings of $1.16 per share surpassed the Zacks Consensus Estimate of $1.04 and surged 43.2% on a year-over-year basis. Also, the top line rose 55% year over year to $3,169.2 million and surpassed the Zacks Consensus Estimate of $2,397 million. The uptick in airfreight revenues boosted the results. Expeditors carry a Zacks Rank #3, at present.

Norfolk Southern Corporation’s NSC fourth-quarter 2020 earnings of $2.64 per share surpassed the Zacks Consensus Estimate of $2.48. Moreover, the bottom line increased 3.5% on a year-over-year basis on lower costs. The company’s railway operating revenues for the quarter under review came in at $2,573 million, outpacing the Zacks Consensus Estimate of $2,556.4 million. However, the top line declined 4.4% year over year due to 1% drop in total volumes and a 3% decline in revenue per unit. Norfolk Southern currently carries a Zacks Rank #3.

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Norfolk Southern Corporation (NSC) : Free Stock Analysis Report

Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report

Triton International Limited (TRTN) : Free Stock Analysis Report

ZTO Express Cayman Inc. (ZTO) : Free Stock Analysis Report

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