ZTO Express (ZTO) Q2 Earnings Top Estimates, Revenues Lag
ZTO Express’s ZTO second-quarter 2023 earnings per share (EPS) of 42 cents beat the Zacks Consensus Estimate of 37 cents and improved year over year.
Total revenues of $1,343.3 million missed the Zacks Consensus Estimate of $1,409 million. However, the top line improved year over year, owing to a rise in revenues at the express delivery services unit (contributing 92.3% to the top line).
Detailed Operational Statistics
Revenues in the core express delivery business jumped 14.1% year over year due to a 23.8% increase in parcel volume and a 7.8% decrease in parcel unit price. Parcel volume market share increased to 23.4% in the reported quarter.
Revenues from freight forwarding services fell 27.6% year over year owing to shrinking cross-border e-commerce demand and declining pricing.
Revenues from sales of accessories (largely consisting of sales of thermal paper used for digital waybills' printing) climbed 33.8%, in line with parcel volume growth. Other revenues were derived mainly from financing services.
The total operating expenses of this China-based company were RMB425.7 million compared with RMB217.3 million in the year-ago quarter. Selling, general and administrative expenses increased 10.4% on the back of the rise in employees' compensation and benefits.
Gross margin rate improved to 33.9% from 25.4% in the year-ago period.
ZTO Express (Cayman) Inc. Price, Consensus and EPS Surprise
ZTO Express (Cayman) Inc. price-consensus-eps-surprise-chart | ZTO Express (Cayman) Inc. Quote
Liquidity & Buyback
ZTO Express exited the second quarter of 2023 with cash and cash equivalents of RMB7.78 billion compared with RMB 9.55 billion at March 2023-end.
As of Jun 30, 2023, ZTO Express purchased 38,473,231 ADSs at an average purchase price of $25.18, including repurchase commissions.
The company’s board of directors has further approved changes to its existing share repurchase program, increasing the value of shares to be repurchased from $1 billion to $1.5 billion and extending the effective time by one year through Jun 30, 2024. The company anticipates funding the repurchases from its existing cash balance.
2023 View Intact
ZTO Express has reaffirmed its expectation for parcel volumes in 2023 in the range of 29.27-30.24 billion.The updated guidance represents an increase of 20-24% year over year.
Currently, ZTO Express carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s JBHT second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines DAL reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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