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ZTO Express (ZTO) Benefits From Parcel Volumes, Expenses Ail
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ZTO Express' (ZTO - Free Report) top line continues to benefit from the upbeat performance of its core express delivery services segment
Recently, the company reported second-quarter 2022 earnings of 33 cents per share, beating the Zacks Consensus Estimate of 27 cents. The bottom line surged year over year despite higher operating expenses and the impact of Omicron-induced woes. Total revenues of $1,292.4 million improved year over year, owing to a rise in revenues at the core express delivery services unit (contributing 91.6% to the top line).
ZTO Express Cayman Inc. Price, Consensus and EPS Surprise
Strength across ZTO Express’ core express delivery services unit is encouraging. Notably, revenues from the unit increased 18.8% year over year in the second quarter of 2022, owing to a 7.5% increase in parcel volumes. With the rapid growth in the e-commerce business, ZTO Express’ parcel volume increased in recent times. ZTO Express anticipates parcel volumes in the range of 24.96-25.86 billion in 2022, indicating a rise of 12-16% year over year.
ZTO Express exited the second quarter with cash and cash equivalents of $1,482.18 million, higher than its current debt of $1,053.97 million. This implies that the company has enough cash to pay off its current debt obligations.
We are impressed with the company's efforts to reward its shareholders even in the current uncertain scenario. As of Jun 30, 2022, ZTO Express repurchased 36.07 million ADSs at an average purchase price of $25.21.
However, higher selling, general and administrative (SG&A) expenses might push up operating expenses and hurt the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. Evidently, SG&A expenses increased 12.8% year over year in 2021. High SG&A expenses led to an increase in operating costs in 2021. In second-quarter 2022, SG&A expenses increased 16% on the back of the rise in compensation and benefits.
Some better-ranked stocks in the broader Zacks Transportation sector that investors can consider are GATX Corporation (GATX - Free Report) , Triton International Limited and Teekay Tankers Ltd. (TNK - Free Report) , each carrying a Zacks Rank #2 (Buy) as well.
GATX Corporation has an expected earnings growth rate of 17.8% for the current year. GATX delivered a trailing four-quarter earnings surprise of 28.9%, on average.
The Zacks Consensus Estimate for GATX’s current-year earnings has improved 2.1% over the past 90 days. Shares of GATX have gained 14.1% over the past year.
Triton has an expected earnings growth rate of 22.4% for the current year. TRTN delivered a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for TRTN’s current-year earnings has improved 4.2% over the past 90 days. Shares of TRTN have gained 24.5% over the past year.
Teekay Tankers has an expected earnings growth rate of 140.1% for the current year. TNK delivered a trailing four-quarter earnings surprise of 46.1%, on average.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have gained 135.8% over the past year.
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ZTO Express (ZTO) Benefits From Parcel Volumes, Expenses Ail
ZTO Express' (ZTO - Free Report) top line continues to benefit from the upbeat performance of its core express delivery services segment
Recently, the company reported second-quarter 2022 earnings of 33 cents per share, beating the Zacks Consensus Estimate of 27 cents. The bottom line surged year over year despite higher operating expenses and the impact of Omicron-induced woes. Total revenues of $1,292.4 million improved year over year, owing to a rise in revenues at the core express delivery services unit (contributing 91.6% to the top line).
ZTO Express Cayman Inc. Price, Consensus and EPS Surprise
ZTO Express Cayman Inc. price-consensus-eps-surprise-chart | ZTO Express Cayman Inc. Quote
How is ZTO Express Doing?
Strength across ZTO Express’ core express delivery services unit is encouraging. Notably, revenues from the unit increased 18.8% year over year in the second quarter of 2022, owing to a 7.5% increase in parcel volumes. With the rapid growth in the e-commerce business, ZTO Express’ parcel volume increased in recent times. ZTO Express anticipates parcel volumes in the range of 24.96-25.86 billion in 2022, indicating a rise of 12-16% year over year.
ZTO Express exited the second quarter with cash and cash equivalents of $1,482.18 million, higher than its current debt of $1,053.97 million. This implies that the company has enough cash to pay off its current debt obligations.
We are impressed with the company's efforts to reward its shareholders even in the current uncertain scenario. As of Jun 30, 2022, ZTO Express repurchased 36.07 million ADSs at an average purchase price of $25.21.
However, higher selling, general and administrative (SG&A) expenses might push up operating expenses and hurt the bottom line. Apart from other factors, increases in compensation, benefits and office expenditures are leading to higher SG&A expenses. Evidently, SG&A expenses increased 12.8% year over year in 2021. High SG&A expenses led to an increase in operating costs in 2021. In second-quarter 2022, SG&A expenses increased 16% on the back of the rise in compensation and benefits.
Zacks Rank and Stocks to Consider
Currently, ZTO Express carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Transportation sector that investors can consider are GATX Corporation (GATX - Free Report) , Triton International Limited and Teekay Tankers Ltd. (TNK - Free Report) , each carrying a Zacks Rank #2 (Buy) as well.
GATX Corporation has an expected earnings growth rate of 17.8% for the current year. GATX delivered a trailing four-quarter earnings surprise of 28.9%, on average.
The Zacks Consensus Estimate for GATX’s current-year earnings has improved 2.1% over the past 90 days. Shares of GATX have gained 14.1% over the past year.
Triton has an expected earnings growth rate of 22.4% for the current year. TRTN delivered a trailing four-quarter earnings surprise of 7.5%, on average.
The Zacks Consensus Estimate for TRTN’s current-year earnings has improved 4.2% over the past 90 days. Shares of TRTN have gained 24.5% over the past year.
Teekay Tankers has an expected earnings growth rate of 140.1% for the current year. TNK delivered a trailing four-quarter earnings surprise of 46.1%, on average.
The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have gained 135.8% over the past year.