3 Transportation Stocks Positioned to Surpass Q3 Earnings Estimates

The Zacks Transportation sector is widely diversified in nature, including airlines, railroads, package delivery companies, and truckers, to name a few. Per the latest Earnings Preview, third-quarter 2025 earnings of the S&P 500 members of the sector are expected to decline 5.9% year over year. Revenues are estimated to be down 4.4%.

With quite a few players in this diversified sector yet to report their financial numbers, we expect the likes of Expeditors International of Washington EXPD, Air Lease Corporation AL and GXO Logistics GXO to report better-than-expected earnings despite headwinds like weak freight demand, tariff-induced uncertainty, inflation-related woes and supply chain disruptions.

Let’s discuss the factors that are likely to have boosted the sector participants’ third-quarter performance.

The recent decline in oil prices is a positive development for the transportation sector, as fuel is one of its largest operating expenses. In 2025, crude oil prices have been under pressure, reaching multi-month lows due to tariff concerns, weakening consumer confidence and increased production by OPEC+. Oil prices fell 4.2% during the July–September period, supporting margin expansion for industry participants.

Additionally, ongoing cost-control efforts amid soft freight demand are expected to have contributed to improved profitability. The continued strength of e-commerce remains a key tailwind for the sector.

For U.S. airlines, steady air travel demand, despite tariff-related economic headwinds, has been encouraging. Shipping companies are also showing resilience in the face of inflation, trade tensions and supply-chain disruptions, particularly those focused on operational efficiency and strategic growth initiatives.

Here’s How to Pick the Right Stocks

Quite a few transportation stocks are likely to report earnings shortly. It is always a daunting task for investors to pick a winning basket of stocks with the potential to deliver better-than-expected earnings. 

While there is no foolproof method of choosing outperformers, our proprietary methodology — the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — helps identify stocks with high chances of delivering a positive surprise in their upcoming earnings announcement. Our research shows that for stocks with this perfect mix of elements, the odds of an earnings beat are as high as 70%.

Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Our Choices

Expeditors, a leading third-party logistics provider, is based in Seattle, WA. EXPD currently has an Earnings ESP of +1.43% 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 2025 results on Nov. 4. 

While weak volumes (with respect to air-freight tonnage and ocean containers) stemming from soft demand and declining rates are likely to have hurt EXPD’s performance, efforts to cut costs in the face of demand weakness are likely to have driven its bottom line. EXPD beat the Zacks Consensus Estimate in each of the last four quarters, the average being 15.3%.

Expeditors International of Washington, Inc. Price and EPS Surprise

Expeditors International of Washington, Inc. price-eps-surprise | Expeditors International of Washington, Inc. Quote

Air Lease is a leading aircraft leasing company. AL currently has an Earnings ESP of +15.63% and a Zacks Rank of 3. The company is slated to report third-quarter 2025 results on Nov. 3.

Air Lease has a diversified customer base in different countries across the globe. The bulk of the company’s business revenues originates from airlines located outside of the United States. Steady growth in the fleet, profits earned from aircraft sales and higher end-of-lease revenues are likely to have contributed to AL's top-line growth.  The company beat the Zacks Consensus Estimate in each of the last four quarters, with the average beat being 11.8%.

Air Lease Corporation Price and EPS Surprise

Air Lease Corporation price-eps-surprise | Air Lease Corporation Quote

GXO Logistics, a pure-play contract logistics provider, is headquartered in Greenwich, CT.  GXO currently has an Earnings ESP of +0.18% and a Zacks Rank of 3. The company is slated to report third-quarter 2025 results on Nov. 4.

Increased e-commerce, automation and outsourcing are likely to aid the company’s results. Cost-cutting efforts are also likely to have boosted the bottom-line performance of GXO. The company surpassed the Zacks Consensus Estimate in each of the last four quarters, with the average beat being 5.3%.

GXO Logistics, Inc. Price and EPS Surprise

GXO Logistics, Inc. price-eps-surprise | GXO Logistics, Inc. Quote

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

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