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Schneider's (SNDR) Q2 Earnings Top Estimates, Sales Miss

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Schneider National, Inc.’s (SNDR - Free Report) second-quarter 2020 earnings of 26 cents per share surpassed the Zacks Consensus Estimate by 7 cents. However, the bottom line declined 23.5% on a year-over-year basis. Operating revenues dropped 15% to $1,032.8 million and lagged the Zacks Consensus Estimate of $1,040 million. Moreover, revenues (excluding fuel surcharge) fell 11% to $964.1 million. Results were hampered by lower volumes and price, downside in fuel surcharge revenues and coronavirus-led disruptions.

Income from operations (on a reported basis) increased 29% from the prior-year quarter’s level to $63.4 million. Adjusted income from operations dropped 24% to $63.6 million in the June-end quarter. Also, adjusted operating ratio (operating expenses as a percentage of revenues) deteriorated 110 basis points to 93.4%. Notably, lower the value of the ratio, the better.

Schneider National, Inc. Price, Consensus and EPS Surprise

Schneider National, Inc. Price, Consensus and EPS Surprise

Schneider National, Inc. price-consensus-eps-surprise-chart | Schneider National, Inc. Quote

Segmental Highlights

Truckload revenues (excluding fuel surcharge) slipped 16% to $451.1 million. Average trucks (company trucks and owner-operated trucks) in the segment also fell 11.7% to 10,241. Further, revenue per truck per week in the segment dropped 4.3%. This downside was mainly due to shutdown of FTFM operations, lower volumes and unfavorable pricing. Truckload income from operations was $40.5 million in the reported quarter, an increase of more than 100%. Moreover, adjusted operating ratio improved to 91% from 98.5% in the year-ago quarter.

Intermodal revenues (excluding fuel surcharge) were $219 million, a decrease of 16% from second quarter 2019. Revenue per order declining 6.3%, primarily due to weak Asia import volumes combined with the prolonged shutdown of non-essential retail customers. Segmental income from operations declined 64% to $11 million as a result increased rail purchased transportation costs. Additionally, intermodal operating ratio deteriorated to 95% in the second quarter from the prior-year quarter’s 88.2%.

Logistics revenues (excluding fuel surcharge) inched up 2% to $230.9 million, primarily due to increased volumes. Logistics income from operations dipped 11% on a year-on-year basis due to lower net revenues per order. Further, operating ratio in the segment deteriorated to 96.4% from 96% in the second quarter of 2020.

Liquidity

Schneider, carrying a Zacks Rank #3 (Hold), exited the second quarter with cash and cash equivalents of $713.8 million compared with $551.6 million at the end of 2019. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

 2020 EPS Guidance

Despite persisting COVID-19 led uncertainties, the company believes that the most significant impact of this unprecedented crisis on its operations was witnessed in the June quarter. Consequently, Schneider restored its full year 2020 EPS guidance. The company expects its adjusted EPS to be within the range of $1.10-$1.25. The Zacks consensus estimate for this metric is pegged at $1.02. Also, the company anticipates its net capital expenditures to be approximately at $260 million.

During the second half of 2020, Schneider expects gradual improvement in its overall operating conditions from increased demand and tighter capacity along with subsequent improvement in its Intermodal margins.

Sectorial Snapshot

Let’s take a look into some other Zacks Transportation sector companies’ second-quarter results.

Canadian National’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) were in line with the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year. Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and fell 21.8% year over year.

J.B. Hunt Transport (JBHT - Free Report) , reported second-quarter 2020 earnings of $1.14 per share that surpassed the Zacks Consensus Estimate by 31 cents. Total revenues of $2,145.6 million beat the Zacks Consensus Estimate of $2,060.9 million.

Kansas City Southern’s (KSU - Free Report) second-quarter earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. Total revenues of $547.9 million lagged the consensus mark of $550.2 million.

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