2 Transportation Companies Reporting Earnings Thursday

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 |  Includes: DRYS, LUV
by: Robert Weinstein

There are not many Transportation stocks reporting on Thursday. These are the biggest ones offering the most liquid markets to profit from. If you own these names or you're looking to buy before the release you may want to think about protecting from the downside through options in case of a miss. Just as important, if you are considering writing options due to the "unusual" premium, know that the price may have a very fast and far move after each company reports. I am including some of the key numbers that I believe should be looked at before investing into earnings.


DryShips Inc. (DRYS) is a $1.4 billion market cap company that trades an average of 8.19 million shares per day. The company was founded in 2004 and is based in Athens, Greece.
Time Released: NA
Industry: Water Transportation
Recent Price: $3.55
52 Week High: $6.44
52 Week Low: $3.56
Book Value: $8.52

Relative to the earnings, investors have not been as aggressive accumulating shares, as the current trailing twelve months (ttm) P/E ratio is 5.82, while the forward P/E ratio is now 3.99. It will be interesting to see if pricing is currently at a discount, or if the market has been correct to price in lower growth and profit expectations. Taking a look at analyst recommendations, I see that the mean rating is a positive outlook for the stock. It is one that I used to follow a few years ago. I looked in several places and did not find the time of the release. This is one that I am going to do a deep dive with before Thursday.

Revenue year-over-year has increased from $859.75 million for 2010 vs. $819.83 million for 2009. The bottom line has rising earnings year-over-year of $172.56 million for 2010 vs. $-26.71 million for 2009. The company's earnings before income and taxes are falling with an EBIT year-over-year of $367.39 million for 2010 vs. $58.31 million for 2009.

Revenue growth is at an annual rate of 246.07%.


Gross reported revenue compared with the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Mar-11 $ 234.12M $ 207.41M $ -26.71M -11.41%
Dec-10 $ 221.12M $ 215.82M $ -5.30M -2.4%
Sep-10 $ 216.93M $ 225.53M $ 8.60M 3.96%
Jun-10 $ 216.27M $ 224.24M $ 7.97M 3.69%
Mar-10 $ 202.80M $ 194.16M $ -8.64M -4.26%
Click to enlarge

M = millions, B = billions

Reported earnings per share compared with the mean estimate. Differences are rounded.

Fiscal Quarter Ending Month-Year Estimate Actual Difference Difference %
Mar-11 0.17 0.15 -0.02 -11.76%
Dec-10 0.26 0.24 -0.02 -7.69%
Sep-10 0.25 0.38 0.13 52%
Jun-10 0.22 0.30 0.08 36.36%
Mar-10 0.22 0.21 -0.01 -4.55%
Click to enlarge

(Some onetime items are often excluded in reported EPS)

Southwest Airlines Co. (LUV) is a $1.4 billion market cap company that trades an average of 7.62 million shares per day. The company was founded in 1967 and is headquartered in Dallas, Texas.
Time Released: Before Open
Industry: Airline
Recent Price: $9.38
52 Week High: $14.32
52 Week Low: $9.61
Book Value: $8.81

Southwest reported (basic) $0.01 per share in earnings for the quarter ending March 31, 2011. Next quarter estimated mean earnings are $0.21 per share. Analyst estimates range from $0.18 to $0.3 per share.
The P/E ratio has been recently discounted, as the current trailing twelve months (ttm) P/E ratio is 15.39, while the forward P/E ratio is now 8.94. It will be interesting to see if pricing is currently at a discount, or if the market has been correct to price in lower growth expectations.

Investors have been rewarded with an increase of year-over-year revenue. Revenue reported was $12.10 billion for 2010 vs. $10.35 billion for 2009. The bottom line has rising earnings year-over-year of $459.00 million for 2010 vs. $99.00 million for 2009. The company's earnings before income and taxes are rising with an EBIT year-over-year of $988.00 million for 2010 vs. $262.00 million for 2009. I have not flown Southwest, but I am negative on the whole airline industry. Sorry, but I can not love this one.

Annually, revenue is growing at a rate of 16.95%.


Gross reported revenue compared with the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Mar-11 $ 3.08 b $ 3.10B $ 19.16M 0.62%
Dec-10 $ 3.08 b $ 3.11B $ 32.59M 1.06%
Sep-10 $ 3.17 b $ 3.19B $ 24.73M 0.78%
Jun-10 $ 3.15 b $ 3.17B $ 16.20M 0.51%
Mar-10 $ 2.63 b $ 2.63B $ -1.70M -0.06%
Click to enlarge

M = millions, B = billions

Reported earnings per share compared with the mean estimate. Differences are rounded.

Fiscal Quarter Ending Month-Year Estimate Actual Difference Difference %
Mar-11 0.03 0.03 0 0.00%
Dec-10 0.15 0.15 0 0.00%
Sep-10 0.25 0.26 0.01 4%
Jun-10 0.26 0.29 0.03 11.54%
Mar-10 0.03 0.03 0 0.00%
Click to enlarge

(Some onetime items are often excluded in reported EPS)

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: I use a proprietary blend of technical analysis, financial crowd behavior, and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online, Google Finance, MSN Money, CNBC, Zacks and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest. I also often include some that are not "confirmed" but are "Proposed" for the same day. The numbers are only as good as the sources. Many of the ADRs that are relatively new provide a special challenge that can be very time consuming to figure out the "best" number. Chinese ADRs that are new seem to be especially prone to conflicts with Reuters, EDGAR Online, and other sources. Not everyone puts companies into the same sector. I use Reuters as my primary guide to keep it consistent.