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Atlas Air (AAWW) to Report Q2 Earnings: Is a Beat in Store?

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Atlas Air Worldwide Holdings AAWW is scheduled to report second-quarter 2020 results on Aug 6, before market open.

The company has a mixed record with respect to earnings surprises. Its bottom line outshined the Zacks Consensus Estimate in two of the last four quarters and missed the mark in the other two. 

Moreover, the Zacks Consensus Estimate for second-quarter earnings has been revised 48.9% upward in the past 90 days.

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

Atlas Air’s second-quarter performance is likely to have been boosted by strong demand for airfreight in the coronavirus-ravaged scenario. The company made adjustments to its fleet to meet the surge in demand.

Surge in e-commerce trends amid the current scenario is likely to have driven the company’s June-quarter performance. The rise in online sales proved to be a boon for cargo carriers. Moreover, with many passenger airlines (that usually carry freight as well as passenger luggage) currently shrinking their fleets due to lackluster air-travel demand, cargo carriers are making hay and transporting a lot of packages.

Revenues from the charter segment are likely to have been high in the to-be-reported quarter owing to increased charter services for cargo transportation. Notably, the Zacks Consensus Estimate for segmental revenues indicates a 26.2% rise from the figure reported sequentially.

Moreover, low fuel costs are likely to have aided the bottom line. Notably, the Zacks Consensus Estimate for expenses on aircraft fuel implies a 7.4% decline from the prior-year reported number.

What Does the Zacks Model Say?

Our proven Zacks model predicts 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 as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Atlas Air has an Earnings ESP of +19.81% as the  Most Accurate Estimate is pegged at $2.48, which is 41 cents above 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 #2, currently.

Highlights of Q1 Earnings

Atlas Air  delivered earnings of $1.15 per share in the first quarter. The Zacks Consensus Estimate was of a loss of 2 cents. Moreover, the bottom line improved 17.4% on a year-over-year basis. Further, total revenues of $643.5 million surpassed the Zacks Consensus Estimate of $587.8 million but declined 5.3% year over year.

Other Stocks to Consider

Investors interested in the broader Transportation sector may check out a few other stocks worth considering like Expeditors International of Washington EXPD, Golar LNG GLNG and Copa Holdings CPA as these too possess the perfect combination of elements to beat estimates this earnings season.

Expeditors has an Earnings ESP of +6.67% and a Zacks Rank of 3, currently. This company is set to release second-quarter financial numbers on Aug 4.

Golar LNG has an Earnings ESP of +2.78% and is Zacks #3 Ranked at present.

Copa Holdings has an Earnings ESP of +19.18% and a Zacks Rank #3 at present. The company will release second-quarter 2020 results on Aug 5.

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