The third-quarter earnings season for the Zacks Transportation sector kicked off on Oct.9, with Delta Air Lines DAL missing bottom-line estimates. High fuel costs and rising non-fuel expenses hurt the bottom line. Several transportation companies are due to report their financial results shortly.
Per the Earnings Outlook dated Oct. 14, while the transportation sector’s earnings for third-quarter 2026 are expected to improve 9.6%, revenues are likely to grow 10.8% on a year-over-year basis. We have identified — with the help of the Zacks Stock Screener — a few transportation players that are set to outshine the Zacks Consensus Estimate with respect to the bottom line this earnings season.
These include Union Pacific Corporation UNP, United Parcel Service UPS, Old Dominion Freight Line ODFL and C.H. Robinson Worldwide CHRW. Before we discuss the companies, let’s take a look at the factors shaping the quarterly performance.
Factors at Play
The transportation sector demonstrated greater resilience than anticipated in the third quarter of 2026. Despite geopolitical uncertainties and persistently high fuel prices, robust air-travel demand and improving freight market conditions appear to have supported transportation companies. Consumers seem to have adjusted to elevated inflation, high interest rates and policy-related uncertainties by modifying their spending patterns accordingly.
Following a prolonged period of downturn, things appear to be brightening as far as freight demand is concerned. Highlighting the brightening freight demand scenario, the Cass Freight Shipments Index improved 2.3% month on month in September 2026. This measure has improved month on month in five of the past seven months, which confirms the improving scenario. Additionally, the measure rose 1.9% year over year, marking its second consecutive annual increase following a three-and-a-half-year contraction, the longest such decline on record.
Transportation companies are increasingly investing in artificial intelligence (AI) to enhance operational efficiency, lower costs and improve safety. Efforts toward cost optimization and automation are helping companies safeguard profitability. Efficiency gains stemming from cost-containment initiatives are likely to have supported bottom-line performance in the September quarter.
Furthermore, the third-quarter results of most shipping companies in the sector are expected to benefit from the resilience of the dry bulk market, supported by factors such as growing Chinese demand for minor bulk commodities and high vessel utilization rates.
Picking Potential Winners
While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with the above-mentioned combination, the chances of an earnings beat are as high as 70%.
For investors seeking to apply this proven model to their portfolio, we have highlighted four transportation stocks that are poised to beat third-quarter earnings estimates.
Headquartered in Omaha, NE, Union Pacific operates a rail network spanning 23 states across the western two-thirds of the United States, serving as a vital component of the global supply chain. The railroad operator currently has an Earnings ESP of +0.29% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to report its third-quarter 2026 results on Oct. 22. Union Pacific’s efforts to reward its shareholders through dividends and share buybacks are commendable. With the freight scene on the mend, the company’s performance is likely to have been aided. The company’s earnings surpassed the Zacks Consensus Estimate in three of the past four quarters (missing the mark on the other occasion), with the average beat being 2.8%.
Union Pacific Corporation Price and EPS Surprise
Union Pacific Corporation price-eps-surprise | Union Pacific Corporation Quote
United Parcel Service’s third-quarter results are likely to reflect its focus on improving profitability over sheer volume. Under the cost-cutting initiatives, UPS has substantially reduced its U.S. operational workforce and closed daily operations at multiple leased and owned buildings. Moreover, United Parcel Service has been focusing on increasing automation in sorting and operations, and leveraging AI for logistics planning to boost efficiency.
The shift in focus toward higher-margin areas such as small and medium-sized businesses or SMBs and healthcare logistics from low-margin volumes is expected to be reflected in UPS’ third-quarter results, scheduled to be released on Oct. 27, and to aid its per-package revenues. United Parcel Service’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters, with the average beat being 12.4%. The company has an Earnings ESP of +1.06% and a Zacks Rank of 3.
United Parcel Service, Inc. Price and EPS Surprise
United Parcel Service, Inc. price-eps-surprise | United Parcel Service, Inc. Quote
Old Dominion Freight Line is a leading less-than-truckload or LTL company. The trucking company is based in Thomasville, NC. The company has an Earnings ESP of +0.25% and a Zacks Rank of 2.
Old Dominion, whose third-quarter performance is likely to have been aided by the brightening freight environment, is scheduled to report results on Oct. 28. The company’s efforts to reward its shareholders through dividends and share buybacks are commendable. Old Dominion’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters, with the average beat being 6.7%.
Old Dominion Freight Line, Inc. Price and EPS Surprise
Old Dominion Freight Line, Inc. price-eps-surprise | Old Dominion Freight Line, Inc. Quote
C.H. Robinson’s consistent initiatives to reward its shareholders through dividends and share repurchases are encouraging. Cost-cutting efforts are expected to have aided its bottom line in the September quarter. Results are scheduled to be out on Oct. 28, 2026.
C.H. Robinson currently has an Earnings ESP of +0.12 % and a Zacks Rank #2. CHRW’s earnings surpassed the Zacks Consensus Estimate in each of the past four quarters, with the average beat being 8.1%.
C.H. Robinson Worldwide, Inc. Price and EPS Surprise
C.H. Robinson Worldwide, Inc. price-eps-surprise | C.H. Robinson Worldwide, Inc. Quote
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Union Pacific Corporation (UNP): Free Stock Analysis Report
United Parcel Service, Inc. (UPS): Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report
Delta Air Lines, Inc. (DAL): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).