3 Transportation Stocks Set to Carve a Beat in This Earnings Season

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, fourth-quarter 2025 earnings of the S&P 500 members of the sector are expected to decline 7.2% year over year. Revenues are estimated to be up 1.9%.

With quite a few players in this diversified sector yet to report their financial numbers, we expect the likes of Canadian National Railway CNI, Expeditors International of Washington EXPD 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’ fourth-quarter performance.

The 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 were under pressure, primarily due to a persistent global oversupply that outpaced sluggish demand growth, weakening consumer confidence and increased production by OPEC+. Oil prices fell 7% during the October-December 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. Upbeat passenger volumes during the Thanksgiving holiday period are likely to have boosted the top-line performance in the to-be-reported quarter.

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 in the coming days. 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 an earnings beat in their upcoming 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

Canadian National, based in Montreal, is involved in the rail, intermodal, trucking and marine transportation and logistics business in Canada and the United States. The railroad operator currently has an Earnings ESP of +0.49% 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 fourth-quarter 2025 results on Jan. 30.  Canadian National’s efforts to reward its shareholders through dividends and share buybacks are commendable. The company has been well served by its Grain & Fertilizers segment. The division is expected to have performed well in the fourth quarter, driving results. The company’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters (missing the mark on the other two occasions), with the average miss being 0.07%.

Canadian National Railway Company Price and EPS Surprise

Canadian National Railway Company price-eps-surprise | Canadian National Railway Company Quote

Expeditors, a leading third-party logistics provider, is based in Seattle, WA. EXPD currently has an Earnings ESP of +0.34% and a Zacks Rank of 3. The company is scheduled to report its fourth-quarter 2025 results on Feb. 24. 

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’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 13.9%.

Expeditors International of Washington, Inc. Price and EPS Surprise

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

GXO Logistics, a pure-play contract logistics provider, is headquartered in Greenwich, CT. The company currently has an Earnings ESP of +0.67% and a Zacks Rank of 3. GXO is slated to report fourth-quarter 2025 results on Feb. 10.

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’s earnings 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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