The Q3 earnings season is in full swing and the financial results that have been released so far indicate a favorable trend. According to our latest Earnings Trends report, this earnings cycle is the first one to reflect positive growth for the S&P 500 Index after back-to-back declines in the past five quarters. As of Oct 28, results of 291 S&P 500 companies were already on board. Earnings have increased 2.2% while revenues have inched up 1.3% year over year. Also, 73.5% of the companies beat earnings estimates and 57.4% outperformed in terms of revenues.
However, the transportation sector continues to lag behind in Q3 on the bottom-line front. With 93.3% of the transportation companies having reported their quarterly numbers as of Oct 28, we observe a 13.7% year-over-year decline in earnings. However, revenues have inched up 1.3% year over year. Although 71.4% of the companies beat earnings estimates and 92.9% surpassed revenue expectations in the quarter, outlook for the transportation sector is not very encouraging as earnings are expected to be down by 13.5% from the prior-year quarter.
With transportation sector earnings announcements drawing to a close, let’s find out how these two stocks are scheduled to perform when they report Q3 results on Nov 1.
Genesee & Wyoming Inc. ( (NYSE:GWR) ) is engaged in operation of short line and freight railroads. According to our proven model, a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or atleast 3 (Hold) – to increase the odds of an earnings surprise. The company carries a Zacks Rank #3 and an Earnings ESP of +3.19% (Most Accurate estimate stands at 97 cents while the Zacks Consensus Estimate is pegged at 94 cents), which makes us reasonably confident of an earnings beat. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Aircastle Ltd. ( (NYSE:AYR) ) acquires and sells commercial aircrafts to airlines through its subsidiaries. The company carries a Zacks Rank #4 (Sell) and has an earnings ESP of 0.00% as both the Most Accurate Estimate and Zacks Consensus Estimate are pegged at 41 cents. Please note that the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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AIRCASTLE LTD (AYR): Free Stock Analysis Report
GENESEE & WYO (GWR): Free Stock Analysis Report
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