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The first-quarter earnings picture for the transportation sector has been unimpressive. This is especially true as earnings of 97% of the market capitalization of the sector are down 5.4% on 1.6% revenue growth. The earnings and revenue beat ratios came in at 69.2% and 38.5%, respectively.

As such, transportation ETFs have seen rough trading over the past month. iShares U.S. Transportation ETF IYT, First Trust Nasdaq Transportation ETF FTXR and SPDR S&P Transportation ETF XTN have lost 6.2%, 7% and 3.9%, 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, surpassed the Zacks Consensus Estimate for earnings but lagged the same for revenues. Earnings of $1.43 per share were 10 cents ahead of the consensus mark but revenues of $21.71 billion came in below the estimated $21.96 billion. For 2024, UPS reaffirmed revenues in the range of $92-$94.5 billion (see: all the Industrials ETFs here).

Major railroad company Union Pacific UNP reported better-than-expected results, while Norfolk Southern Corp NSC missed estimates on both fronts. Union Pacific topped the consensus estimate for earnings by 19 cents and the revenue estimate by $29 million. Norfolk lagged the earnings estimate by 9 cents and the revenue estimate by $26 million.

U.S. airlines Delta Air Lines DAL and United Airlines UAL reported better-than-expected results. Delta reported earnings per share of 45 cents, outpacing the Zacks Consensus Estimate of 36 cents. Revenues of $13.75 billion also edged past the consensus mark of $12.84 billion. United Airlines reported a loss of 15 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 53 cents. Revenues of $12.54 billion came in above the estimated $12.43 billion.

Last but not least, leading trucking carrier J.B. Hunt JBHT missed estimates for earnings by 31 cents per share and for revenues by $173 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 43 securities. The six in-focus firms make up a combined 42.6% share. From a sector perspective, rail transportation and air freight & logistics take the largest share at 26.4% and 20.6%, respectively, while passenger ground transportation, cargo ground transportation and passenger airlines round off the next three spots with double-digit exposure each.

iShares U.S. Transportation ETF has accumulated $846.2 million in its asset base and charges 40 bps in annual fees. It has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: 4 Industry ETFs to Play as US Manufacturing Grows in 1.5 Years).

SPDR S&P Transportation ETF (XTN)

SPDR S&P Transportation ETF tracks the S&P Transportation Select Industry Index, holding 43 stocks in its basket. The in-focus firms account for at least 2% share each. About 29% 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.

With AUM of $166.1 million, SPDR S&P Transportation ETF charges 35 bps in fees per year from its investors and has a Zacks ETF Rank #2 with a High risk outlook.

First Trust Nasdaq Transportation ETF (FTXR)

First Trust Nasdaq Transportation ETF offers exposure to the 41 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. The in-focus six firms represent a combined 25.6% share. Automobiles, airlines, delivery services, and railroads are the top sectors, accounting for double-digit exposure each.

First Trust Nasdaq Transportation ETF has amassed $37.9 million in its asset base and charges 60 bps in annual fees. FTXR has a Zacks ETF Rank #2.

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iShares U.S. Transportation ETF (IYT): ETF Research Reports

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.