UAL Vs. CSX: Which Stock Is Poised For Better Q1 Earnings?
Zacks Investment Research | Apr 15, 2018 09:51PM ET
The Q1 earnings season is in the nascent stage with a handful of S&P 500 participants having reported results so far. In fact, this reporting cycle has started on a strong note courtesy of earnings beats from big names in the banking space like JPMorgan Chase & Co. (NYSE:JPM) . The current week is also going to be a busy one with several companies reporting their quarterly results. This week alone will see 156 companies, including 53 S&P 500 participants, revealing their Q1 numbers.
In fact, the projection for Q1 earnings season is very encouraging. Per the latest transportation sector, wherein earnings are anticipated to increase 15.4%. Notably, this highly diversified sector includes airlines and railroads, among others. We believe that the favorable economic indicators along with promising fiscal and regulatory policies from the current administration bode well for the sector.
Already, the transportation sector has seen one of its key members — Delta Air Lines Inc. (NYSE:DAL) — reporting better-than-expected earnings per share and revenues in Q1. However, high fuel costs contributed to a year-over-year decline in earnings. The trend is likely to continue through the current reporting cycle as fuel costs are on the rise and expenses pertaining to fuel represent one of the major input costs for any transportation company.
Of late, oil prices have been on an uptrend and were up approximately 8% in the Q1 (January-March) period. In fact, the first quarter of 2018 witnessed U.S. oil benchmark reach its highest settlement since December 2014.
Given this backdrop, investors should keenly await earnings reports of key transportation companies — the Jacksonville, FL- based railroad operator, CSX Corporation (NASDAQ:CSX) and the Chicago-based airline heavyweight, United Continental Holdings, Inc. (NYSE:UAL) — on Apr 17.
UAL vs. CSX
We have assessed these transportation companies on the following parameters.
Price Performance
In the first quarter of 2018, United Continental clearly outpaced CSX in terms of price performance. United Continental rallied 3% compared with CSX’s 1.2% rally.
ESP and Earnings History
Earnings ESP is our proprietary methodology for identifying stocks that have high chances of surprising in their upcoming earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate. Our research shows that for stocks with the combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive CSX to Report Q1 Earnings: What's in Store for the Stock? )
Get The News You Want
You can see .
Even with respect to earnings surprise history United Continental holds the edge over CSX. This is because the airline has managed to surpass the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 4.6%. On the other hand, CSX outpaced the consensus mark in three of the past four quarters by an average of 10.3%.
Projected Earnings Growth
We expect year-over-year earnings growth for the soon-to-be-reported quarter to be 29.4% for CSX, higher than 22.5% for United Continental.
Bottom Line
Our comparative analysis shows that United Continental is poised for a better first quarter, as the company clearly scores higher than CSX with respect to most of the considered parameters.
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Zacks Investment Research
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.