Watch These 4 Transportation Stocks for Q3 Earnings: Beat or Miss?

The widely diversified Zacks Transportation sector continues to navigate through a challenging macroeconomic environment. The sector grapples with multiple headwinds, ranging from escalated expenses, inflation-induced elevated interest rates, a downturn in freight demand and supply-chain woes. Geopolitical uncertainties and tariff-induced economic tensions continue to hurt consumer sentiment and growth expectations.

With inflation remaining a concern, risks associated with an economic slowdown and geopolitical tensions dampen the prospects of stocks belonging to this sector. Sluggish economic growth and inflationary woes are likely to make markets more volatile in the coming days. Due to supply-chain troubles, costs will likely continue to be steep going forward.

On a brighter note, the southward movement of oil prices bodes well for the bottom-line growth of sector participants. This is because fuel expenses are a significant input cost for the transportation companies. Oil prices decreased 4.2% in the July-September 2025 period.

Given this backdrop, investors interested in the Zacks Transportation sector are keenly waiting for the results of Southwest Airlines Co. (LUV), Union Pacific Corporation (UNP), American Airlines Group Inc. (AAL) and Norfolk Southern Corporation (NSC) – all of which are slated to be released this week.

Our quantitative model predicts an earnings beat for a company if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This combination increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Let’s delve deeper.

Southwest Airlines

We expect LUV's performance in the to-be-reported quarter to have been boosted by an uptick in total revenues, driven by high passenger revenues as domestic air-travel demand stabilizes. Our estimate for passenger revenues in the to-be-reported quarter indicates a 1.3% increase from third-quarter 2024 actuals.

The Zacks Consensus Estimate for LUV’s third-quarter 2025 revenues is pegged at $6.97 billion, indicating 1.44% growth year over year. The Zacks Consensus Estimate for LUV’s third-quarter 2025 earnings has been revised upward by more than 100% in the past 60 days to 1 cent per share. However, the consensus mark implies a 93.33% downside from the year-ago actual.

LUV is scheduled to report third-quarter 2025 results on Oct. 22. Our proven model does not conclusively predict an earnings beat for LUV, as it has an Earnings ESP of -268.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Union Pacific Corporation

The Zacks Consensus Estimate for third-quarter 2025 revenues is pegged at $6.23 billion, indicating a 2.34% upside from the year-ago actual. Our estimate for freight revenues (which accounts for the majority portion of total revenues) is pegged at $5.86 billion, which indicates an increase of 1.7% from third-quarter 2024 actuals. However, the consensus mark for other revenues is pegged at $311.3 million, implying a 3.6% decrease from third-quarter 2024 actuals.

The Zacks Consensus Estimate for third-quarter 2025 earnings has been revised 0.34% upward in the past 60 days and is pegged at $2.99 per share. Additionally, the consensus mark implies an 8.73% uptick from the year-ago actual.

UNP is scheduled to report third-quarter 2025 results on Oct. 23, before market open. Our proven model does not conclusively predict an earnings beat for UNP, as Union Pacific has an Earnings ESP of -0.16% and a Zacks Rank #3 at present.

American Airlines

The Zacks Consensus Estimate for AAL’s third-quarter 2025 loss has been widened from 25 cents per share to a loss of 27 cents in the past 60 days. The company reported earnings of 30 cents per share in the year-ago quarter. The consensus estimate lies within the company provided guided range of a loss per share of 10-60 cents.

For the third quarter of 2025, management expects total revenues to be either down 2% or increase by up to 1% from year-ago levels. The Zacks Consensus Estimate for AAL’s third-quarter 2025 revenues is pegged at $13.63 billion, indicating a 0.13% decline year over year. The downside is likely to have been partially offset by improving travel demand and lower fuel prices.

AAL is scheduled to report third-quarter 2025 results on Oct. 23, before market open. Our proven model does not conclusively predict an earnings beat for American Airlines this time around, as AAL has an Earnings ESP of -0.68% and a Zacks Rank #3 at present.

Norfolk Southern

The Zacks Consensus Estimate for NSC’s third-quarter 2025 earnings has been revised downward by 4.50% in the past 60 days to $3.18 per share. Moreover, the consensus mark implies a 2.15% downside from the year-ago actual. The Zacks Consensus Estimate for NSC’s third-quarter 2025 revenues is pegged at $3.09 billion, indicating 1.26% growth year over year.

E-commerce demand has been driving shipment volumes for Norfolk Southern and is likely to boost results. NSC’s robust free cash flow generation also enables it to maintain steady, shareholder-friendly initiatives. On the flip side, softness in the freight market and volumes is a negative for NSC and is likely to have hurt its performance in the to-be-reported quarter. Inflationary pressure, high interest rates, tariff-related uncertainties, weak freight demand and supply-chain disruptions also act as other headwinds for NSC’s prospects.

NSC is scheduled to report third-quarter 2025 results on Oct. 23, after market close. Our proven model does not conclusively predict an earnings beat for Norfolk Southern this time, as it has an Earnings ESP of -0.68% and a Zacks Rank #4 (Sell) at present.

Norfolk Southern Corporation Price and EPS Surprise

Norfolk Southern Corporation price-eps-surprise | Norfolk Southern Corporation Quote

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This article originally published on Zacks Investment Research (zacks.com).

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