What's In Store For Expeditors (EXPD) This Earnings Season?

Expeditors International of Washington (NASDAQ:EXPD) is expected to report first-quarter 2017 results on May 2.

The company posted a positive earnings surprise of 3.39% in the last quarter. In fact, it delivered earnings surprises in two of the last four quarters.

Earnings Whispers

Our quantitative model does not conclusively show earnings beat for Expeditors in this quarter. This is because a company needs the right combination of two key ingredients – a positive Earnings ESP and a Zacks Rank #3 (Hold) or better – to be able to beat estimates. However, this is not the case as given below.

Zacks ESP: Earnings ESP for Expeditors is -1.79% as the Most Accurate estimate is pegged at a penny below the Zacks Consensus Estimate of 56 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:Expeditors carries a Zacks Rank #3. Though the company has a favorable Zacks Rank, its -1.79% ESP complicates our surprise prediction. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Note that we caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors Likely at Play

Expeditors’ results in the first quarter are likely to be hurt by lower consumer and business demand. Also, the challenging conditions in the Airfreight Service market might serve as a dampener due to overcapacity woes. Given that bulk of its revenues are derived from Airfreight Services, weak performance of the segment will hurt results big time. Competition from the likes of Matson Inc. (NYSE:MATX) and Student Transport Inc. (TO:STB) is likely to hurt results. .

However, the company’s strong balance sheet and its asset light business model raise optimism. We are also impressed with its policy of awarding shareholders through dividends and share buybacks.

Stock to Consider

Investors interested in the broader transportation space may also consider Air Lease Corporation (NYSE:AL) as our model shows it possesses the right combination of elements to post an earnings beat in the first quarter.

Air Lease Corporation has an Earnings ESP of +1.16% and a Zacks Rank #3. The company will report first-quarter results on May 4.

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