ZTO Express (ZTO) to Report Q3 Earnings: What's in Store?
ZTO Express ZTO is set to release third-quarter 2022 earnings results on Nov 21, after market close.
ZTO has a decent surprise history, as its earnings surpassed the Zacks Consensus Estimate in two of the last four quarters. ZTO reported in-line earnings for the remaining two quarters. The average earnings beat is 8.9%.
ZTO Express Cayman Inc. Price and EPS Surprise
ZTO Express Cayman Inc. price-eps-surprise | ZTO Express Cayman Inc. Quote
The Zacks Consensus Estimate for third-quarter earnings has decreased 7.1% to 26 cents per share in the past 60 days.
Let’s discuss the factors that might have impacted this Shanghai-based company’s September-quarter performance.
We expect selling, general and administrative expenses to have been high in the to-be-reported quarter due to escalated compensation and benefits, and office expenditures. Fuel costs are also likely to have been high in the September quarter. This is also likely to have hurt the bottom line.
Additionally, gross margin deterioration (due to intense competition-led decline in average selling prices) is expected to hurt results. These might have dented ZTO Express’ third-quarter performance.
However, ZTO Express’ express delivery services segment is likely to have performed well in the third quarter on the back of strong parcel volumes. Akin to the last few quarters, parcel volumes are likely to have been aided by rapid e-commerce growth in the quarter to be reported as well.
Earnings Whispers
Our proven model does not 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, which is not the case here, as elaborated below. 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 26 cents. 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 Q2 Earnings
ZTO Express' second-quarter 2022 earnings of 33 cents per share beat the Zacks Consensus Estimate of 27 cents. The bottom line surged year over year despite higher operating expenses and the impact of Omicron-induced woes. Total revenues of $1,292.4 million improved year over year owing to higher revenues at the core express delivery services unit (contributing 91.6% to the top line).
Q3 Performances of Some Transportation Companies
Delta Air Lines’ DAL third-quarter 2022 earnings (excluding 42 cents from non-recurring items) of $1.51 per share fell short of the Zacks Consensus Estimate of $1.56. Escalated operating expenses induced the earnings miss. Multiple flight cancelations and booking weaknesses due to Hurricane Ian also hurt results. DAL reported earnings of 30 cents per share a year ago, muted in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,975 million, which lagged the Zacks Consensus Estimate of $14,157.2 million. Driven by high air-travel demand, total revenues increased more than 52% on a year-over-year basis.
United Airlines’ UAL third-quarter 2022 earnings (excluding 5 cents from non-recurring items) of $2.81 per share beat the Zacks Consensus Estimate of $2.21 and our estimate of $2.17. Upbeat air-travel demand aided results.
In the year-ago quarter, UAL incurred a loss of $1.02 per share as air-travel demand was not as buoyant as in the current scenario. The third quarter of 2022 was the second consecutive profitable period at UAL since the onset of the pandemic.
Operating revenues of $12,877 million beat the Zacks Consensus Estimate of $12,709.5 million and our estimate of $12, 631.6 million. UAL’s revenues increased more than 66% year over year owing to an uptick in air-travel demand. The optimistic air-travel demand scenario is also evident from the 13.2% increase in total operating revenues from the third-quarter 2019 (pre-coronavirus) levels.
J.B. Hunt Transport Services JBHT reported better-than-expected third-quarter 2022 results, wherein both earnings and revenues outperformed the respective Zacks Consensus Estimate. JBHT’s quarterly earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.45 and improved 36.7% year over year.
JBHT’s operating revenues of $3,838.3 million also outperformed the Zacks Consensus Estimate of $3803.4 million. The top line jumped 22.1% year over year on the back of strength across the Dedicated Contract Services, Intermodal, Truckload and Final Mile Services segments. Total operating revenues, excluding fuel surcharges, rose 12.4% year over year.
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ZTO Express Cayman Inc. (ZTO) : Free Stock Analysis Report
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