Freight News:
Wabash realizes Q1 fruits of reorganization and long-term deals
Trailer maker Wabash beat earnings estimates in the first quarter, pointing to a successful reorganization of the company four years in the making and long-term customer deals that lock in future revenue.
“Customer portfolio reshaping [is] a significant redesign of our organization, and reporting structure [is] a new customer-centric go-to-market approach,” CEO Brent Yeagy told analysts Wednesday on a conference call.
Reducing multiple business units to just transportation solutions and parts and service — and offering better prices to customers to lock in orders for longer periods — are starting to pay off, executives said.
“While progress is easily indicated by our first-quarter performance, what really drives long-term value is the fact that our management system works to benefit customers, suppliers, employees, and communities and shareholders together,” Yeagy said.
By the numbers
Wabash posted quarterly revenue of $621 million, up 13.6% from a year earlier. Operating income of $69.9 million set a record, and the company achieved an operating margin of 11.3%.
Record earnings per diluted share of $1.04 compared to 24 cents in the first quarter of 2022. Wabash increased full-year guidance to $4 to $4.50 — a midpoint of $4.25.
“I think it’s fair to say that most financial models do not have Wabash generating our 2023 EPS guidance of $4.25 even at peak levels,” Yeagy said. The company is basing the forecast at 80% of capacity, “suggesting peak earnings levels that are significantly in excess of our current guidance.”
Investors reacted positively to the confidence. Wabash shares closed 9.42%, or $2.09, higher at 24.27 on the New York Stock Exchange.
Backlog covers next 12 months or longer
Total company backlog — orders received but not built as of March 31 — stood at approximately $3.1 billion, up 31% compared to the first quarter of 2022.
“Our backlog remains strong. Combined with our first-quarter performance, gives us confidence to guide to a record year,” Yeagy said in a news release. It will take at least the next year to work through unbuilt orders.
“With freight rates pressured and uncertainty regarding the timing of a market rebound, we expect customers to diligently manage capital spending, but remain optimistic about their prioritization of van trailers and we continue to be excited about the strength in our tank trailer, truck body, and parts and services businesses.”
Other Wabash highlights
Also during Q1, Lafayette, Indiana-based Wabash:
- Added digital broker Loadsmith as a partner in its Trailers as a Service program that started with FreightVana.
- Signed a multiyear supply deal with J.B. Hunt Transport that will cover 15,000 trailers over coming years.
- Shipped 11,780 trailers in Q1, slightly below 11,865 a year ago. Truck body shipments increased to 3,815 from 3,485 in the past year’s January-March period.
- Began low-volume dry van production at its Lafayette Bay South Plant, converted from refrigerated van production to dry van production. It is expected to reach 10,000 units a year — adding 20% dry van capacity.
- Increased production of tank trailers by 29% compared to a year earlier.
Related articles:
Wabash cuts multiyear trailer supply deal with J.B. Hunt
Wabash Q4, full-year revenue, operating income hit records
Betting big on dry vans, Wabash increases capacity by 20%
Click for more FreightWaves articles by Alan Adler.
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