The transportation sector is struggling this earnings season with total earnings from 97.9% of the sector’s total market capitalization that has reported so far down 14.2% despite revenue growth of 5.1%. This is much below earnings growth of 9.6% and revenue growth of 10% for the same period, in the last reporting cycle.
Earnings and revenue beat ratio of 69.2% and 61.5%, respectively, are also disappointing despite the fact that most of the industry players dominating the sector managed to beat our estimates on earnings or revenues or both.
For a better understanding, let’s dig into the earnings results of some well-known industry players:
Transportation Earnings in Focus
The world’s largest package delivery company United Parcel Service (UPS – Free Report) topped the Zacks Consensus Estimate on both fronts. Earnings of $1.45 surpassed our earnings estimate by a penny while revenues of $15.98 billion edged past the estimated $15.61 billion. For fiscal 2017, the company narrowed its earnings per share guidance range from $5.80-$6.10 to $5.85-$6.10. The Zacks Consensus Estimate at the time of earnings release was pegged at $6.00.
The major railroads Union Pacific (UNP – Free Report) , Kansas City Southern (KSU – Free Report) and Norfolk Southern Corp (NSC – Free Report) also beat on both the top and bottom lines. NSC outpaced the earnings estimate by a wide margin of 11 cents while earnings at UNP and KSU came ahead by a penny and three cents, respectively. Revenues for the three railroads trumped their Zacks Consensus Estimate by $102 million, $9 million and $40 million, respectively.
Ryder Systems (R – Free Report) , the leader in supply chain management and fleet management services, beat the earnings estimate by four cents and revenue estimate by $42 million.
The two largest U.S. airlines Delta Air Lines (DAL – Free Report) and United Continental (UAL – Free Report) reported better-than-expected results but the latter lagged on revenues. Earnings of $1.57 and revenues of $11.1 billion at Delta edged past the Zacks Consensus Estimate of $1.54 and $11.03 billion, respectively. At United Continental, earnings per share of $2.22 came above the Zacks Consensus Estimate of $2.18 but revenues of $9.878 billion slightly fell shy of the estimated $9.88 billion.
