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The Zacks Transportation sector faces multiple headwinds, including inflation-driven high interest rates, weak freight demand and ongoing supply-chain issues. Geopolitical uncertainties and higher inflation continue to hurt consumer sentiment and growth expectations. The freight market downturn, caused by excess freight capacity relative to freight volumes, has also severely impacted the sector.

Amid the abovementioned negatives, low fuel costs also provide a tailwind for the transportation sector. Since fuel costs are a major expense for transportation companies, this decline is expected to support bottom-line growth for the sector's stocks.

The recovery in demand from pandemic lows is another key positive. The increase in trading volumes is expected to have contributed to the strong performance of transportation companies in the upcoming quarter.

Against this backdrop, investors interested in the Zacks Transportation sector are keenly waiting for the results of American Airlines AAL, Alaska Air Group ALK, Union Pacific UNP and CSX CSX, which are slated to be released this week.

Our quantitative model predicts an earnings beat for a company if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This combination increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Let’s delve deeper.

American Airlines’ top line is likely to have benefited from strong passenger volumes in the December-end quarter, with most revenues coming from domestic markets. Robust demand for international flights is likely to have contributed to higher international passenger revenues. Favorable pricing is also likely to have boosted overall revenue growth in the quarter to be reported.

The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised upward by 60% over the past 60 days, now pegged at 64 cents per share. This represents a 120.7% increase compared to the year-ago period. The Zacks Consensus Estimate for fourth-quarter 2024 revenues stands at $13.4 billion, calling for 2.7% growth from the previous year.

AAL is set to release its fourth-quarter 2024 results on Jan. 23, before market open. Our proven model predicts an earnings beat for AAL this time, as it has an Earnings ESP of +3.99% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

American Airlines Group Inc. Price and EPS Surprise

American Airlines Group Inc. price-eps-surprise | American Airlines Group Inc. Quote

Alaska Air Group’s fourth-quarter top line is expected to have increased in the December quarter due to expanded global connectivity driving higher passenger demand from new long-haul routes. The Zacks Consensus Estimate for ALK’s fourth-quarter top-line results is likely to see a 37.6% year-over-year increase, reaching $3.51 billion.

The Zacks Consensus Estimate for ALK’s fourth-quarter 2024 EPS has been revised downward by 26.6% in the past 60 days to 47 cents. However, the consensus mark implies a 56.7% rise from the year-ago actuals.

Moreover, ALK’s optimistic guidance for the fourth quarter of 2024 adds to the positive outlook. To meet the strong demand, the company anticipates the available seat miles (a measure of capacity) to increase by 1.5-2.5% in the fourth quarter of 2024 compared to the same period in 2023. ALK issued positive earnings per share guidance for the fourth quarter, expecting EPS between 20 cents and 40 cents.

ALKis scheduled to report fourth-quarter 2024 results on Jan. 23, before market open. Our proven model does not conclusively predict an earnings beat for ALK this season, as it has an Earnings ESP of -1.57% and sports a Zacks Rank #1 at present.

Alaska Air Group, Inc. Price and EPS Surprise

Alaska Air Group, Inc. price-eps-surprise | Alaska Air Group, Inc. Quote

United Pacific's performance in the to-be-reported quarter is likely to have been negatively impacted by the challenges of the freight market downturn and a sluggish consumer market. The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 0.4% upward in the past 60 days and is pegged at $2.78 per share.

The consensus mark implies a 2.6% uptick from the year-ago actuals. The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $6.15 billion, indicating a 0.2% fall from the year-ago actual.

UNP is scheduled to report fourth-quarter 2024 results on Jan. 23, before market open. Our proven model does not conclusively predict an earnings beat for UNP this time, as it has an Earnings ESP of -0.18% and a Zacks Rank #3 at present.

Union Pacific Corporation Price and EPS Surprise

Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote

CSX’s top line in the fourth quarter is expected to have decreased moderately by around $200 million due to lower fuel prices and weaker coal markets. The Zacks Consensus Estimate for CSX’s fourth-quarter 2024 revenues is pegged at $3.58 billion, indicating a 2.6% decline year over year.

On the flip side, weakness pertaining to freight revenues and volumes does not bode well for CSX. The Zacks Consensus Estimate for CSX’s fourth-quarter 2024 earnings has decreased from 44 cents per share to 43 cents per share in the past 60 days.

CSX is scheduled to report fourth-quarter 2024 results on Jan. 23, after market close. Our proven model does not conclusively predict an earnings beat for CSX this season, as it has an Earnings ESP of -0.29% and carries a Zacks Rank #4 (Sell). The Earnings ESP was -0.64% when we issued our fourth-quarter 2024 earnings preview, and the Zacks Rank was the same.

CSX Corporation Price and EPS Surprise

CSX Corporation price-eps-surprise | CSX Corporation Quote

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