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April 28, 2022 7:29 PM, EDT

Schneider Reports 68% Jump in Earnings for Q1

Schneider trucksApril marks the fifth anniversary of Schneider becoming a publicly traded company. (Schneider)

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Schneider National’s earnings surged 68% year-over-year during the first quarter, the company reported April 28.

The Green Bay, Wis.-based truckload, intermodal and logistics services provider posted net income of $92.1 million, or 52 cents a diluted share, for the three months ending March 31. That compared with $54.8 million, 31 cents, during the 2021 period. Total operating revenue increased 32% to $1.62 billion from $1.23 billion.

“This month marks our fifth anniversary of being a publicly traded company,” Schneider CEO Mark Rourke said during a call with investors. “The transformation of Schneider to date has not been consistently recognized when you consider the current trading multiple of the company. And the most recently completed quarter, in our three segments of truckload, intermodal and logistics, the asset-light segments of intermodal logistics represented 61% of the segment’s revenue mix.”

Mark Rourke

Rourke

Rourke added intermodal order count grew 1% year-over-year with container growth of 26%. He noted this has enabled opportunities for rail conversion and growth as rail fluidity begins to return to the network. The logistics segment’s order count growth exceeds 20% in the brokerage offering. That places revenue on par with the truckload segment.

“While we are very proud of our truckload heritage and truckload remains a very important element of our long-term positioning of the Schneider enterprise,” Rourke said, “these metrics illustrate Schneider is much more than a one-way truckload organization.”

The results exceeded expectations by investment analysts on Wall Street, who had been looking for 52 cents per share and quarterly revenue of $1.55 billion, according to Zacks Consensus Estimate.

 

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Schneider also noted in the report that income from operations increased 77% to $135.1 million from $76.2 million during the year-ago period. It included a $50.9 million net gain related to a property sale that closed in the quarter.

But results were somewhat impacted by an adverse court ruling April 25 related to litigation with former owners of Watkins and Shepard Trucking (WSL). An adverse state tax audit assessment for prior reporting years amounting to $5.2 million also impacts income from operations.

Schneider plans to appeal.

Truckload segment revenue for Q1 increased 21% to $548.4 million from $451.7 million year-over-year. This primarily was due to dedicated new business growth, favorable revenue and network management that partially was offset by a lower truckload network fleet count and lower productivity. The acquisition of Ohio-based truckload carrier Midwest Logistics Systems also helped to boost revenue.

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“The acquisition is going well,” Rourke said. “We intended to build upon the associate and customer-based strengths with an approach of running it separately with targeted costs and operational synergies that are focused on improving driver and customer experienced opportunities.

“With one quarter under our belts, we are pleased that the approach has been well-received by the MLS associates and customers, and the business results are at or above expectations for both revenue and earnings.”

Income from operations for the truckload segment jumped 212% to $119.4 million from $38.3 million last year. This was primarily driven by the earnings impact of the gain on a property sale as well as revenue and network management. This was partially offset by higher driver costs.

The intermodal segment reported that revenue increased 18% to $302.1 million from $255.8 during the prior year quarter. This was primarily due to a 16% improvement year-over-year in revenue per order as well as volume growth. This was despite fluidity challenges. Intermodal grew its container count by over 2,200 units at 26% fleet growth year-over-year. Schneider on Jan. 19 announced plans to expand its intermodal service by moving its primary Western rail partnership to Union Pacific Railroad.

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“Our stated goal is to double intermodal by 2030,” Rourke said. “Part of that plan was to create competitive differentiations with the largest industry player with shippers who most value an asset-based execution model of owned container, owned chassis and company driver dray model.”

Intermodal income from operations increased 95% to $38.9 million from $20 million last year. This mostly was driven by constructive revenue management that partially was offset by higher rail and drayage driver costs.

Logistics segment revenue rose 53% to $545.7 million from $355.9 million during the prior-year quarter. This was due to increased revenue per order and 24% brokerage volume growth over the 2021 period.

Logistics income from operations increased 164% to $41.9 million from $15.9 million. This primarily was attributed to increased net revenue per order and volume that was enabled by increased contribution from the Power Only offering. The FreightPower platform also helped drive results in the logistics segment. The service provides its users with access to capacity and freight.

Schneider ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and No. 19 on the TT list of the Top 100 largest logistics companies.