Transport ETFs Riding High on Q1 Earnings

The first-quarter earnings picture for the transportation sector has been impressive. Earnings of the sector increased 8.6% on 1.2% higher revenues. The earnings and revenue beat ratios came in at 69.2% each. 

As such, transportation ETFs have seen solid trading over the past month. iShares U.S. Transportation ETF IYT, SPDR S&P Transportation ETF XTN and First Trust Nasdaq Transportation ETF FTXR have gained 9.7%, 8% and 8.2%, respectively. 

For a better understanding, let’s delve into the results of some well-known industry players.

Transportation Earnings in Brief

The world's largest package delivery company, United Parcel Service UPS reported first-quarter 2025 earnings of $1.49 per share, which beat the Zacks Consensus Estimate of $1.44 and improved 4.2% year over year. Revenues of $21.5 billion edged past the Zacks Consensus Estimate of $21.1 billion but decreased 0.7% year over year. 

Major railroad company Norfolk Southern Corp NSC reported mixed results, while Union Pacific UNP missed estimates on both fronts. Norfolk missed the consensus estimate for earnings by 3 cents but beat the same for revenues by $2 million. Union Pacific missed the earnings estimate by 3 cents and the revenue estimate by $61 million.

U.S. airlines Delta Air Lines DAL reported strong results, while United Airlines UAL disappointed on revenues. Delta reported earnings per share of 46 cents, which surpassed the Zacks Consensus Estimate by 6 cents. Revenues of $14.04 billion edged past the consensus mark of $13.81 billion. United Airlines reported earnings per share of 91 cents, beating the Zacks Consensus Estimate of 75 cents. Revenues of $13.21 billion slightly fell short of the Zacks Consensus Estimate of $13.22 billion (read: Travel Slump Hits Airlines: Should You Buy the Dip With ETF?).

Last but not least, leading trucking carrier J.B. Hunt JBHT outpaced the consensus mark for earnings by a couple of cents and for revenues by $3 million.

ETFs in Focus

iShares U.S. Transportation ETF (IYT)

iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 44 securities. The six in-focus firms make up a combined 39.4% share. From a sector perspective, rail transportation takes the largest share at 26%, while passenger ground transportation, passenger airlines, air freight & logistics, and cargo ground transportation round off the next three spots with double-digit exposure each. 

iShares U.S. Transportation ETF has accumulated $566.4 million in its asset base and charges 39 bps in annual fees. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

SPDR S&P Transportation ETF (XTN)

SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 44 stocks in its basket. The in-focus firms account for about 2% share each. About 29.6% of the portfolio is dominated by cargo ground transportation, while passenger airlines and air freight & logistics round off the next two with double-digit exposure each (see: all the Industrials ETFs here).

With an AUM of $179 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and has a Zacks ETF Rank #3 with a High risk outlook.

First Trust Nasdaq Transportation ETF (FTXR)

The First Trust Nasdaq Transportation ETF provides exposure to the 40 most liquid U.S. transportation securities, selected based on volatility, value, and growth by tracking the Nasdaq US Smart Transportation Index. The in-focus six firms represent a combined 23.9% share. Automobiles, airlines, railroads, delivery services and commercial vehicle-equipment leasing are the top sectors, accounting for double-digit exposure each. 

First Trust Nasdaq Transportation ETF has amassed $26.2 million in its asset base and charges 60 bps in annual fees. FTXR has a Zacks ETF Rank #3.

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

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