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Schneider (SNDR) Q4 Earnings Miss Estimates, Decrease Y/Y

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Schneider National’s (SNDR - Free Report) fourth-quarter 2019 earnings (excluding 6 cents from non-recurring items) of 37 cents per share missed the Zacks Consensus Estimate by 2 cents. The bottom line also declined 24.5% year over year. Also, operating revenues dipped 12.5% to $1,156.3 million, lagging the Zacks Consensus Estimate of $1,224.6 million. Moreover, revenues (excluding fuel surcharge) decreased 12% to $1,040.5 million. Results were hampered by lower volumes and unfavorable pricing.

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

Moreover, income from operations (on a reported basis) plunged 34.1% to $78.1 million in the fourth quarter, mainly due to the $13.3-million charges regarding the first-to-final mile shutdown (FTFM) within the truckload unit. Adjusted income from operations declined 24% to $91.4 million in the December-end quarter. Also, adjusted operating ratio (operating expenses as a percentage of revenues) shrunk 140 basis points to 91.2%. Notably, lower the value of the ratio the better.

Segmental Highlights

Truckload revenues (excluding fuel surcharge) slipped 15% to $494.5 million. Average trucks (company trucks and owner-operated trucks) in the segment also fell 10.5% to 10,356. Further, revenue per truck per week for the segment dropped 4.3%. This downside was mainly due to unfavorable pricing. Income from operations in the segment was $40.4 million in the reported quarter, down 46%. Moreover, adjusted operating ratio deteriorated to 89.1% from 84.4% in the year-earlier period.

Intermodal revenues (excluding fuel surcharge) dipped 3% to $261.2 million, with revenue per order declining 4%, primarily due to a change in mix related to seasonal project orders. Segmental income from operations decreased 19% to $32.2 million as a result of higher third-party costs. Additionally, intermodal operating ratio deteriorated to 87.7% in the fourth quarter from the prior year’s 85.2%.

Logistics revenues (excluding fuel surcharge) dropped 19% to $227.8 million, primarily due to a customer in-sourcing activity in the segment’s import/export operations. Brokerage accounted for 85.7% of logistics revenues (excluding fuel surcharge) in the quarter compared with 77.9% in the prior year, with brokerage volume expanding 5% year over year.

However, net revenue compression primarily induced a 51% decline in segmental income from operations to $7.9 million. Further, operating ratio of the segment deteriorated to 96.5% from 95.3% in the fourth quarter of 2018.

2020 EPS View

This Zacks Rank #5 (Strong Sell) company expects full-year adjusted earnings per share between $1.25 and $1.35. The mid-point of the guided range ($1.30 per share) matches the Zacks Consensus Estimate. Meanwhile, the company anticipates net capital expenditures of approximately $310 million in the year.

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

Upcoming Releases

Investors interested in the broader Transportation  sector await fourth-quarter 2019 earnings reports from key players like Air Lease Corporation AL, Expeditors International of Washington EXPD and Hertz Global Holdings HTZ .

Air Lease and Expeditors will announce results on Feb 14 and Feb 18, respectively. Hertz will release fourth-quarter earnings on Feb 24.

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