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Schneider (SNDR) Segmental Strength Aids Growth, Costs Ail

Schneider National, Inc.’s SNDR top line is benefiting from strength across its Truckload, Intermodal and Logistics segments, which recorded a year-over-year revenue increase of 20%, 22% and 21%, respectively, in second-quarter 2022.

The surge in Truckload revenues was primarily owing to Midwest Logistics Systems revenues, effective yield management and dedicated new business growth. The Intermodal segment is benefiting from favorable revenue management actions, while the Logistics unit is thriving on the back of increased revenue per order and higher volumes within the company’s brokerage offering, including increased contribution from the Power Only service offering and incremental port dray revenues.  

Further, Schneider National anticipates an excess demand condition with a gradual supply-chain improvement. Due to the bullish demand scenario, management raised the 2022 earnings per share (EPS) forecast. Schneider now anticipates 2022 adjusted EPS in the range of $2.60-$2.70 (previous view: $2.55-$2.70).

On the flip side, rising operating expenses, mainly due to high purchased transportation costs and salaries, wages and benefits, can hurt the bottom line. Total operating expenses increased 27.1% year over year in second-quarter 2022, with a 19.9% surge in purchased transportation costs and a 23.6% rise in salaries, wages and benefits expenses.

Zacks Rank and Stocks to Consider

Currently, Schneider carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Zacks Transportation sector are GATX Corporation GATX, Ryder System, Inc. R and Teekay Tankers Ltd. TNK, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GATX Corporation has an expected earnings growth rate of 17.8% for the current year. GATX delivered a trailing four-quarter earnings surprise of 28.9%, on average.

The Zacks Consensus Estimate for GATX’s current-year earnings has improved 2.1% over the past 90 days.

Ryder has an expected earnings growth rate of 56.3% for the current year. R delivered a trailing four-quarter earnings surprise of 30.2%, on average.

The Zacks Consensus Estimate for Ryder’s current-year earnings has improved 4.2% over the past 90 days.

Teekay Tankers has an expected earnings growth rate of 140.1% for the current year. TNK delivered a trailing four-quarter earnings surprise of 46.1%, on average. Teekay Tankers has a long-term expected growth rate of 3%.

The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have soared 142% over the past year.

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