Schneider Reports 18% Earnings Decline for Q4
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Schneider experienced an 18% year-over-year drop in fourth-quarter earnings, the company reported Feb. 2.
The Green Bay, Wis.-based truckload motor carrier posted net income of $110.1 million, or 62 cents a diluted share, for the three months ending Dec. 31. That compared with $134.1 million, 75 cents, during the same time the previous year.
Revenue decreased by 1% to $1.56 billion from $1.57 billion.
“As expected, the fourth quarter was atypical what is normally experienced during the peak holiday shipping season,” Schneider CEO Mark Rourke said during a conference call with investors Feb. 2. “Especially in the irregular route network portions of our business in both truckload and intermodal. Domestic intermodal container volume moderated as import activity waned.”
The quarterly results were mixed when it came to expectations by investment analysts on Wall Street, which had been looking for 61 cents per share and quarterly revenue of $1.68 billion, according to Zacks Consensus Estimate.
For the full year, Schneider reported net income of $457.8 million, or $2.56 a share, on revenue of $6.6 billion, compared with net income of $405.4 million, $2.28, on revenue of $5.61 billion in 2021.
“While fourth-quarter adjusted earnings were 16% below those of 2021, full-year earnings of $617 million were 16% above 2021,” Stephen Bruffett, chief financial officer at Schneider, said on the call. “In addition to the favorable financial results of 2022, the path traveled is worth noting. 2022 was a year in which we advanced our strategic objectives of growing dedicated, intermodal and logistics at a faster rate than the other components of our portfolio.”
The truckload segment revenue during fourth quarter increased 4% to $545.4 million from $523.6 during the same time the previous year. The increase was due to dedicated growth. That included nearly 500 units of organic dedicated new business as well as the acquisition of MLS. These gains were partially offset by lower miles per tractor related to moderating market demand and lower network price including less premium freight opportunities year-over-year. Income from operations decreased 21% to $68.9 million from $87.7 million.
“Dedicated revenues within the truckload segment grew 45% over 2021,” Bruffett said, “a result of organic growth in the MLS acquisition. For the year, dedicated revenues were 53% of truckload segment revenues compared to 42% in 2021. Intermodal and Logistics both posted record revenues and earnings in 2022, and together they delivered about half of segment earnings.”
The intermodal segment revenue decreased 1% to $315.5 million from $317.6 million the prior year. This was primarily due to moderating market demand that was partially offset by a 7% improvement in revenue per order. Income from operations decreased 3% to $52.8 million from $54.6 million. This was due to the impact of favorable yield and network management being offset by higher equipment and dray driver costs.
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Schneider noted in the earnings report that during the quarter it was able to transition its western rail operations to Union Pacific. The company noted that the move further enables its plans to double intermodal offering by 2030 while providing customers more lane options and more frequent departures.
The logistics segment revenue decreased 22% to $425 million from $547.5 million. This was primarily due to decreased revenue per order and 5% lower brokerage volume year-over-year. Income from operations decreased 36% to $24.1 million from $37.4 million. This was due to lower volumes and decreased net revenue per order.
Schneider ranks No. 8 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and No. 19 on the TT Top 100 list of the largest logistics companies.