(Schneider National)
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Schneider National profit in the second quarter of 2024 slumped 54% as price increases failed to arrive as early as the carrier expected and ongoing freight market weakness saw intermodal and logistics revenue decline.
Schneider reported net income of $35.3 million in Q2, down 54% from $77.5 million in the same period in 2023. The company’s diluted earnings per share fell 53% year over year to 20 cents from 43 cents in Q2 2023.
Green Bay, Wis.-based Schneider said Aug. 1 its revenue fell 2% in the most recent quarter to $1.317 billion from $1.347 billion in the year-ago period.
Schneider’s earnings fell short of analysts’ forecasts. Consensus analyst expectations were for a 1.8% increase in revenue to $1.37 billion, according to Zacks Equity Research.
“We are approximately three-quarters of the way through the freight allocation season in our network businesses and those outcomes have shifted the timing of achieving the level of pricing improvements that we previously anticipated,” Chief Financial Officer Darrell Campbell said in a statement accompanying the earnings.
As a result, the company cut its 2024 adjusted diluted earnings per share guidance to 80-90 cents from 85 cents-$1 previously.
The company is also scaling back its capital expenditure to $300 million-$350 million from $350 million-$400 million previously.
Rourke
However, during the company’s quarterly earnings call, CEO Mark Rourke said Q2 saw “positive indicators, including seasonal demand, tightening supply during the annual Roadcheck event, increased spot pricing and modest contract price gains in our truckload network.”
“While we are not calling a market inflection just yet and the sustainability of these trends has not yet been proven, there are signs of market improvement, which we anticipate will present opportunities as we move forward,” he added.
Schneider ranks No. 9 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, No. 4 out of intermodal/drayage players and No. 7 among truckload carriers. It also ranks No. 21 on the TT Top 100 list of the largest logistics companies.
The company’s intermodal revenue, excluding fuel surcharges, totaled $253.1 million in Q2, a decrease of 3% from $261 million in the same quarter in 2023, largely due to lower revenue per order, it said. Revenue per order dropped to $2,446 from $2,572.
In addition, the intermodal unit’s operating ratio was 94.2 in Q2, compared with 90.9 a year earlier. Operating ratio provides insight on how well a company is balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
Schneider’s logistics revenue excluding fuel surcharge in Q2 decreased 7% to $318.8 million from $343.4 million in the same quarter in 2023, on the back of lower revenue per order and a 4% decrease in brokerage volume.
At Schneider’s truckload unit, the company’s largest division, revenue excluding fuel surcharge totaled $540.3 million in the most recent quarter, an increase of $7.6 million or 1.4% from $532.7 million in the same quarter in 2023.
The company said the increase was the result of “organic and acquisitive growth” from the unit’s dedicated operations, although this was partially offset by lower network operations pricing and volumes.
Schneider’s truckload fleet expanded to a Q2 average of 10,665 vehicles from 10,363 in the year-ago period.
“In our truckload network, we achieved another quarter of modest contractual price gains. And for the first time in two years, [the] spot price in June exceeded contract price,” Rourke said during the call.
“Importantly, spot [prices] remained above contract [prices] for the full month of July as well. However, we are behind the tempo that we expected in our prior guidance, therefore, shifting out the timing of the pricing recovery,” he added.
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