Yesterday (02/18/20), WAB reported 4Q EPS slightly below Consensus, provided C20 cash EPS guidance largely in line with expectations, and gave C20 cash flow guidance well below our expectations. The 2020 guidance has been an overhang on the stock given big declines in rail locomotive deliveries this year, and with the guide now behind us, the stock rallied 4%.
Search Coverage List, Models & Reports
Search Results1-10 out of 4999
The STB released January headcount data for the rails (U.S. operations only) yesterday. Total headcount declined 12% y/y in January vs. -11% each of the prior 2 months. This is the largest y/y decline in the history of our data series (back to 2001). Total headcount also fell 2.4% m/m in January, the 14th straight sequential monthly reduction. Headcount on average for the Big 3 US rails declined 14% y/y, while volumes fell 6% y/y on average, implying the best labor productivity in the past 13 months.
Yesterday (02/18/20), EXPD reported 4Q EPS of $0.79, in line with its pre-report of $0.78-$0.81 and down over 20% y/y against a very tough comp when EXPD benefited from pre-tariff shipping activity. Consolidated net revenue declined 5% y/y with gross revenue and gross yields both below our expectations. Net operating margins also declined 400bp y/y as headcount increased despite weak volumes. The stock rose 1% yesterday after it had fallen 9% since its pre-report.
WAB reported GAAP 4Q EPS of $0.71 but adjusted earnings of $1.04 vs. Cons. of $1.06. On a cash basis, WAB reported 4Q EPS of $1.24, in line with our model as we already moved to cash EPS. Total sales beat our model by 6% (Freight 14% above our model but Transit 8% below), while adjusted operating margins of 15.3% were 100bp below our expectations.
Our WR Transport index fell 0.5% last week, underperforming the 1.6% rise in the S&P 500. The Integrators (FDX/UPS) outperformed last week (+2%), while the Forwarders (-3%) lagged the most.
We spoke with consumer products shipper about the potential impact of coronavirus on global air and ocean trends. Our contact noted that production in China isn't close to normal levels yet with many people not yet back at work. Additionally, there are a lot of logistical challenges in China with local trucking for loading and conveying. So while there have been some blank ocean sailings, our contact has not seen backlogs of freight in China build up yet. But this shipper believes the situation will change very quickly and expects the biggest issues with finding airfreight capacity. Capacity right now is essentially limited to freighters as passenger airlines have effectively cut almost all their flights. As a result, inbound rates to China are already tracking up ~50% from normal levels. Outbound rates haven't spiked yet given factory delays, but once production ramps, our contact believes airfreight rates out of China could spike to 2x-3x previous levels.
The Wolfe Industrials team hosts a webcast on Fridays at 11:00AM ET to discuss industrials and transports news and themes for the week. Presenting analysts include Scott Group (Airfreight & Surface Transportation), Hunter Keay (Airlines and Aerospace & Defense), Nigel Coe (Electrical Equipment & Multi-Industry), and Rod Lache & Dan Galves (Autos, Auto Parts, & Auto Technology).
This morning, R reported a 4Q adjusted EPS loss of ($0.01), below Cons. of +$0.03. R also provided C20 EPS guidance of $1.30 at the midpoint, materially below prior Cons. of $2.56 including a much larger than expected loss in 1Q:20. The stock fell another 10%.
R reported an adjusted 4Q EPS loss of ($0.01) vs. Cons. of +$0.03, our estimate of +$0.01 and prior guidance of ($0.03)-+$0.07. Dedicated results were slightly better than our expectations, SCS results slightly worse, and FMS results materially worse than we expected, offset by a much bigger tax shield in the quarter. Losses on sales of $10M were worse than our $5M expectation but improved from a $23M loss in 3Q.
Yesterday (2/11/20), a U.S. District Court judge in Texas ruled in favor of the rails and issued a permanent injunction ordering the largest railway labor union (SMART-TD) to negotiate with the rails about train crew sizes. The rails kicked off the latest round of labor negotiations late last year including a proposal to move to one-person crews and redeploy conductors from locomotives to ground-based positions. However, the conductors’ union has refused to negotiate on this issue, and yesterday's ruling now forces the union to start negotiating on crew size.
- 1 of 500
- next →