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Schneider (SNDR) Grapples With Segmental Weakness & High Debt
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Schneider National, Inc.’s (SNDR - Free Report) top line continues to grapple with issues like lower pricing in the network, lower revenue per order, and lower brokerage volume.
The company reported disappointing fourth-quarter 2023 results, wherein earnings of 16 cents per share missed the Zacks Consensus Estimate of 21 cents and declined 75% from the year-ago quarter’s levels. Operating revenues of $1,371.7 million outpaced the Zacks Consensus Estimate of $1,366.1 million but fell 12.1% year over year. Revenues (excluding fuel surcharge) decreased 11% to $1,194.8 million.
Although Truckload revenues (excluding fuel surcharge) for the fourth quarter of 2023 grew 1% year over year, revenues for the other two segments did not perform well. Intermodal revenues (excluding fuel surcharge) were $260.6 million, down 17% year over year, due to 17% lower revenue per order. Logistics revenues (excluding fuel surcharge) for the fourth quarter of 2023 came in at $342.1 million, down 20% year over year, owing to decreased revenue per order and lower brokerage volume year over year.
Additionally, Schneider's liquidity position raises concerns about the stock. Schneider exited the fourth quarter of 2023 with cash and cash equivalents of $102.4 million, lower than the long-term debt of $197.6 million, implying that the company does not have enough cash to meet its debt obligations.
Partly due to these headwinds, shares of SNDR have plunged 18% compared with the industry’s decline of 8.6% in the past six months.
Image Source: Zacks Investment Research
On the flip side, the company's efforts to reward shareholders look encouraging. To this end, in January 2024, the company's board approved a dividend hike of 5.5% on its Class A and Class B common stock, thereby raising the quarterly cash dividend to 9.5 cents from 9 cents per share. Such moves instill investors’ confidence in the stock. The raised dividend is expected to be paid on Apr 9, 2024, to shareholders of record as of Mar 8. In February 2023, SNDR announced the approval of a $150 million stock repurchase program.
As of Dec 31, 2023, SNDR has repurchased 2.5 million Class B shares for a total of $66.2 million under the program and paid $63.6 million in the form of dividends to shareholders year to date.
Zacks Rank and Stocks to Consider
SNDR currently carries a Zacks Rank #5 (Strong Sell).
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 6.1% upward over the past 90 days. GATX has an expected earnings growth rate of 3.68% for 2024. Shares of GATX have gained 18% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 6.3% over the past 90 days. Shares of SKYW have surged 205.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Schneider (SNDR) Grapples With Segmental Weakness & High Debt
Schneider National, Inc.’s (SNDR - Free Report) top line continues to grapple with issues like lower pricing in the network, lower revenue per order, and lower brokerage volume.
The company reported disappointing fourth-quarter 2023 results, wherein earnings of 16 cents per share missed the Zacks Consensus Estimate of 21 cents and declined 75% from the year-ago quarter’s levels. Operating revenues of $1,371.7 million outpaced the Zacks Consensus Estimate of $1,366.1 million but fell 12.1% year over year. Revenues (excluding fuel surcharge) decreased 11% to $1,194.8 million.
Although Truckload revenues (excluding fuel surcharge) for the fourth quarter of 2023 grew 1% year over year, revenues for the other two segments did not perform well. Intermodal revenues (excluding fuel surcharge) were $260.6 million, down 17% year over year, due to 17% lower revenue per order. Logistics revenues (excluding fuel surcharge) for the fourth quarter of 2023 came in at $342.1 million, down 20% year over year, owing to decreased revenue per order and lower brokerage volume year over year.
Additionally, Schneider's liquidity position raises concerns about the stock. Schneider exited the fourth quarter of 2023 with cash and cash equivalents of $102.4 million, lower than the long-term debt of $197.6 million, implying that the company does not have enough cash to meet its debt obligations.
Partly due to these headwinds, shares of SNDR have plunged 18% compared with the industry’s decline of 8.6% in the past six months.
Image Source: Zacks Investment Research
On the flip side, the company's efforts to reward shareholders look encouraging. To this end, in January 2024, the company's board approved a dividend hike of 5.5% on its Class A and Class B common stock, thereby raising the quarterly cash dividend to 9.5 cents from 9 cents per share. Such moves instill investors’ confidence in the stock. The raised dividend is expected to be paid on Apr 9, 2024, to shareholders of record as of Mar 8. In February 2023, SNDR announced the approval of a $150 million stock repurchase program.
As of Dec 31, 2023, SNDR has repurchased 2.5 million Class B shares for a total of $66.2 million under the program and paid $63.6 million in the form of dividends to shareholders year to date.
Zacks Rank and Stocks to Consider
SNDR currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Zacks Transportation sector are GATX Corporation (GATX - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GATX has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the remaining one). The average beat is 16.47%.
The Zacks Consensus Estimate for 2024 earnings has been revised 6.1% upward over the past 90 days. GATX has an expected earnings growth rate of 3.68% for 2024. Shares of GATX have gained 18% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 6.3% over the past 90 days. Shares of SKYW have surged 205.3% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.