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ArcBest (ARCB) to Post Q3 Earnings: Is a Beat in the Cards?

Zacks Equity Research
Updated

ArcBest Corporation ARCB is scheduled to release third-quarter 2018 results on Nov 1, after the market closes.

In the last reported quarter, it delivered a positive earnings surprise of 13.1%. Additionally, the company has an impressive track record with respect to earnings per share. ArcBest outshined the Zacks Consensus Estimate in each of the trailing four quarters, the average being more than 100%.

A history of positive earnings surprise generally works as a catalyst in sending a stock higher. It indicates the company’s ability to surpass the estimates.

The above statement is certainly true in the case of ArcBest. In a year’s time, the stock has gained 10.1%, against its industry’s 4.1% decline.

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One-Year Price Performance

 

Given this bullish backdrop with respect to earnings surprises, investors are optimistic about a beat in the third quarter as well.

What Does the Zacks Model Say?

Adding to the buoyant scenario, our proven model shows that ArcBest is likely to beat estimates in the third quarter of 2018, courtesy of a perfect combination of the following two key ingredients:

Earnings ESP: ArcBest has an Earnings ESP of +5.04%. While the Most Accurate Estimate stands at $1.16 per share, the Zacks Consensus Estimate is pegged lower at $1.10. A positive Earnings ESP is indicative of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: ArcBest carries a Zacks Rank #1 (Strong Buy). Note that stocks with a Zacks Rank #1, 2 (Buy) or 3 (Hold) have significantly higher chances of beating estimates.You can see the complete list of today’s Zacks #1 Rank stocks here.

Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.

ArcBest Corporation Price and EPS Surprise

 

ArcBest Corporation Price and EPS Surprise | ArcBest Corporation Quote

Factors Likely to Influence Third-Quarter Results

In the quarter to be reported, ArcBest is likely to benefit from the upbeat freight scenario in the United States. The robust freight demand should result in revenue growth from its asset-based business, which accounts for bulk of the company’s top line. The Zacks Consensus Estimate for third-quarter 2018 revenues from its asset-based business stands at $583 million, much higher than the $517 million registered a year ago.

Total billed revenue per hundredweight on asset-based shipments should increase driven by the company’s asset-based pricing initiatives and higher fuel surcharges. The Zacks Consensus Estimate for the metric stands at $35.84, much higher than the $32.53 registered a year ago.

However, asset-based daily tonnage is expected to be 1.3% lower than the 13,118 registered in the second quarter of 2018. The key metric is projected to be lower due to the implementation of initiatives pertaining to yield management, inclusive of the space-based pricing program introduced a year ago.

Moreover, operating expenses are likely to increase significantly in the third quarter of 2018 owing to escalating fuel costs and higher salaries and wages. This, in turn, is likely to weigh on the company’s bottom-line growth.

Other Stocks to Consider

Investors interested in the broader Transportation sector may also consider C.H. Robinson Worldwide, Inc. CHRW, SkyWest, Inc. SKYW and Hertz Global Holdings, Inc. HTZ as these stocks too possess the right combination of elements to come up with an earnings beat in their next releases.

C.H. Robinson has an Earnings ESP of +0.27% and a Zacks Rank #2. The company will release its third quarter 2018 results on Oct 30.

SkyWest has an Earnings ESP of +1.78% and a Zacks Rank #3. The company will release its third-quarter 2018 results on Oct 30.

Hertz Global Holdings has an Earnings ESP of +13.48% and a Zacks Rank #2. The company will release its third-quarter 2018 results on Nov 8.

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SkyWest, Inc. (SKYW) : Free Stock Analysis Report
 
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
 
ArcBest Corporation (ARCB) : Free Stock Analysis Report
 
Hertz Global Holdings, Inc (HTZ) : Free Stock Analysis Report
 
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