This month’s Macro examines March and April data. As shown on Slide 8, freight vols on avg. declined 2% y/y in March and are tracking up less than 1% y/y based on preliminary April data after growing close to 3% the 1st two months of the year. Moreover, our proprietary Seasonal Freight Index (Slide 7) has dipped back below 50 the past 2 months after accelerating sharply late last year and early this year.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
HTLD reported 1Q EPS of $0.23, well above our est. and Cons. of $0.19. Higher than expected gains on sales (+$0.03 vs. our model) drove the majority of upside but underlying EBIT ex. gains was still 10% better than we expected. Total rev. was 200bp worse than our forecast but margins were 170bp better ex. gains.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
HTLD reported 4Q EPS of $0.17, a penny above our est. and Cons., driven by higher than expected gains on sales (+$0.03 vs. our model) partially offset by a higher tax rate (-$0.02 vs. our model). Normalizing for these items, HTLD missed our EBIT expectation by 8% and missed our EPS by $0.01. Freight rev. was 30bp better than our forecast but margins were 140bp worse ex. gains on sales.
After most TLs missed in 3Q, we expect more in-line reports and slight beats in 4Q as spot TL rates relatively improved and fuel should be a small sequential benefit after spiking during 3Q. Based on improved spot rates, we expected reported yields net of fuel to re-accelerate slightly, although utilization likely remained negative y/y.
HTLD reported 3Q EPS of $0.15, in line with our low-end est. but well below Cons. of $0.18. While total rev. beat our expectations, margins and overall EBIT were worse. Rev. grew 2% y/y but EBIT and EPS declined 22% and 15% y/y into lower gains on sales as expected. Ex. gains, EBIT fell 2% and EPS was flat y/y. We also estimate fuel was a $0.01 y/y drag in 3Q vs. a $0.01 benefit in 2Q. We are leaving our low-end C12-13 EPS estimates unchanged at $0.72 and $0.77 or about 5% and 7% below Cons. the next 2 years next 2 years. While downside seems limited after HTLD’s recent pullback, we see more upside for other TL stocks which we expect to show greater leverage to improving TL pricing gains and market share growth the next several years.
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.