Back to top

Image: Bigstock

Schneider (SNDR) Q2 Earnings Miss, '19 EPS View Bearish

Read MoreHide Full Article

Schneider National, Inc.’s (SNDR - Free Report) second-quarter 2019 adjusted earnings of 34 cents per share missed the Zacks Consensus Estimate by a penny. The bottom line also decreased 15% year over year. Also, operating revenues dipped 2% to $1.21 billion, lagging the Zacks Consensus Estimate of $1.3 billion. Moreover, revenues (excluding fuel surcharge) slid 1% to $1.09 billion. Results were hampered by lower volumes and other factors.
 
Meanwhile, income from operations (on a reported basis) plunged 46% to $49.2 million in the second quarter. Also, adjusted operating ratio (operating expenses as a percentage of revenues) deteriorated 110 basis points to 92.3%.

Segmental Highlights

Truckload revenues (excluding fuel surcharge) declined 6% to $534.9 million. Revenue per truck per week for the segment dropped 7%. This downside was due to decreased productivity as a result of lower volumes among other factors.  Dedicated standard revenue per truck per week fell 7.4% on a year-over-year basis.

Income from operations at the segment tumbled 87% due to lower for-hire volumes, FTFM (First to Final Mile) goodwill impairment charge and other factors. Moreover, operating ratio deteriorated to 98.5% compared with 89.2% in the year-ago period.

Intermodal revenues (excluding fuel surcharge) rose 12% to $259.8 million on 2% growth in orders and an 11% rise in revenue per order. The improvement in revenue per order was primarily owing to increased contract pricing and the length of haul.

Segmental income from operations decreased 6% as a result of increased purchased transportation costs and reduced asset utilization. Additionally, intermodal operating ratio deteriorated to 88.2% in the reported quarter from 86% in the year-ago period.

Logistics revenues (excluding fuel surcharge) dropped 9% to $227 million due to lower revenue per order among other factors. Brokerage accounted for 87.5% of logistics revenues (excluding fuel surcharge) in the quarter compared with 78.9% in the prior year.

Lower customer volumes at the company’s supply chain and import/export businesses and certain other factors resulted in 12% decline in segmental income from operations. Further, operating ratio at the segment deteriorated to 96% from 95.9% in the second quarter of 2018.

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


2019 EPS View Trimmed

This Zacks Rank #5 (Strong Sell) company expects full-year adjusted earnings per share between $1.30 and $1.38, lower than the previous projection of $1.50-$1.60 (which was slashed from $1.65-$1.75 anticipated earlier). The Zacks Consensus Estimate for 2019 earnings stands at $1.4. The bearish view is due to expectation of weak pricing and lower demand for the company’s for-hire Truckload, Intermodal and brokerage services in the second half of the year. Meanwhile, the forecast for net capital expenditures has been reduced to $325 million from $340 million expected previously.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

First to Final Mile Service to Shut Down

The earnings release apart, Schneider announced the shutdown of its First to Final Mile (FTFM) service within the truckload unit due to its below-par performance. The operations will close completely by this year-end and the company will bear total pre-tax restructuring charges of $50-$70 million during the second half.

Upcoming Releases

Investors interested in the broader Transportation sector are keenly awaiting second-quarter earnings reports from key players, namely Expeditors International of Washington, Inc. (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Hertz Global Holdings, Inc (HTZ - Free Report) . While Expeditors and Hertz will report financial numbers on Aug 6, Air Lease will release the same on Aug 8.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>