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It is a well-documented fact that the widely-diversified transportation sector is on the mend this year as coronavirus-induced restrictions are being eased and economic activities are picking up with more people getting vaccinated each day. The Zacks  Transportation - Air Freight and Cargo industry has remained the brightest spot amid the pandemic and has surged 92.9% in the past year.

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Amid this bullish backdrop, FedEx Corporation (FDX - Free Report), which along with United Parcel Service (UPS - Free Report), dominates and defines the Zacks Transportation - Air Freight and Cargo industry, will release its fourth-quarter fiscal 2021 (ended May 31, 2021) results tomorrow i.e. Jun 24.

Factors Likely to Impact FedEx Q4 Results

Even though coronavirus-led restrictions have eased, e-commerce is still likely to have been the primary growth driver for FedEx in the to-be-reported quarter. Backed by e-commerce growth, the Zacks Consensus Estimate for fiscal fourth-quarter revenues at the FedEx Ground unit, which handles e-commerce deliveries for many retailers, stands at $7,903 million, indicating an increase of 23.6% from the reported figure in the year-ago quarter.

Owing to higher revenues, the Zacks Consensus Estimate for operating income at the segment stands at $1,033 million, indicating an increase of 53.4% from the fiscal fourth-quarter 2020 actuals. Residential volume growth is likely to have driven FedEx Ground revenues in the quarter to be reported.

The Ground unit apart, other primary segments. namely FedEx Express and FedEx Freight, are likely to report higher revenues year over year. While international export and U.S. domestic-package volume growth are anticipated to have generated higher revenues at FedEx Express, higher revenues per shipment and average daily shipments are likely to have boosted revenues at the FedEx Freight unit in the to-be-reported quarter.

Notably, the Zacks Consensus Estimate for revenues in the fiscal fourth quarter at the FedEx Express unit currently stands at $10,878 million, indicating an increase of 27.1% from the reported figure in the year-ago quarter. Similarly, the consensus mark for Freight segment’s revenues is currently pegged at $1,986 million, 22.9% above the year-ago quarter’s actuals.

Driven by impressive performance at the segments, total sales are likely to have benefited. Notably, the consensus mark of $21.43 billion for total sales suggests an increase of 23.4% from the year-earlier quarter’s reported number.

Why a Likely Earnings Beat

Adding to the optimism, the proven Zacks model predicts an earnings beat for FedEx this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive earnings surprise.

The company currently has an Earnings ESP of +1.71% as the Most Accurate Estimate is pegged at $5.10, higher than the Zacks Consensus Estimate of $5.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Moreover, FedEx carries a Zacks Rank #2.

In the event of the prediction coming true, the FedEx stock, which has surged in excess of 100% in the past year, is likely to get a further boost. This is because an earnings beat more often than not leads to stock price appreciation.