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Atlas Air (AAWW) to Report Q4 Earnings: What's in Store?

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Atlas Air Worldwide Holdings is scheduled to report fourth-quarter 2020 results on Feb 18, before market open.

The company has a stellar surprise record with its earnings having outshined the Zacks Consensus Estimate in each of the last four quarters, the average being in excess of 100%.

Moreover, the Zacks Consensus Estimate for fourth-quarter earnings has been stable at $3.29 per share in the past 60 days.

Against this backdrop, let’s take a look at the factors that might have impacted the company’s December-quarter performance.

We expect Atlas Air’s fourth-quarter performance to have been buoyed by upbeat airfreight demand despite the current turbulent scenario. In a bid to match this demand uptick, the company made adjustments to its fleet.

Moreover, fourth-quarter results are likely to benefit from higher commercial charter yields. Notably, the Zacks Consensus Estimate for direct contribution from the charter segment suggests an increase of more than 100% from the figure reported in fourth-quarter 2019.

Additionally, moderate fuel costs are likely to have aided the bottom line in the to-be-reported quarter. Notably, the Zacks Consensus Estimate for aircraft fuel expenses implies a 14.4% decline from the prior-year quarter’s reported number.

However, revenues from the ACMI segment are likely to have been higher from the third quarter of 2020 in the to-be-reported quarter owing to an uptick in the average revenue per block hour and increased flying. Notably, the Zacks Consensus Estimate for ACMI segment’s revenues is pegged at a 3% decrease from the reported figure in third-quarter 2020. Similarly, the same indicates a 14.3% decline from the figure reported in fourth-quarter 2019.

What Does the Zacks Model Say?

Our proven Zacks model does not predict an earnings beat for Atlas Air this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here as illustrated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Atlas Air has an Earnings ESP of 0.00% as the Most Accurate Estimate of $3.29 is in line with the Zacks Consensus Estimate.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Atlas Air carries a Zacks Rank #3, currently.

Highlights of Q3 Earnings

In the last reported quarter, the company reported earnings per share (excluding 6 cents from non-recurring items) of $2.84, surpassing the Zacks Consensus Estimate of $2.34. Revenues too increased 24.1% to $809.9 million from the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $792.1 million.

Stocks to Consider

Investors interested in the broader Transportation sector may consider Golar LNG Limited (GLNG - Free Report) , Herc Holdings Inc. (HRI - Free Report) and Expeditors International of Washington (EXPD - Free Report) as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

Golar LNG has an Earnings ESP of +50.00% and a Zacks Rank of 3 currently. The company will release fourth-quarter earnings on Feb 25.

Herc Holdings has an Earnings ESP of +9.63% and a Zacks Rank #2, presently. The company will announce fourth-quarter results on Feb 18.

Expeditors has an Earnings ESP of +0.32% and is currently Zacks #3 Ranked. The company is set to release fourth-quarter results on Feb 16.

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