GREEN BAY, Wis. — Schneider National Inc.’s Q3 results show the company has $263.7 million outstanding on total debt and finance lease obligations compared to $302.1 million as of December 31, 2023.
“In the third quarter, our Dedicated and Intermodal businesses demonstrated their resilience, and Logistics maintained its profitable operations,” said Mark Rourke, president and CEO. “Dedicated performed well, with a robust new business pipeline, and Intermodal achieved margin growth due to enhanced network optimization, improved dray productivity, and our ongoing cost management actions. Additionally, Logistics continues to effectively manage net revenue and lower the cost of serving customers by advancing our Schneider FreightPower technology and automation. Finally in our Network truck business, contract pricing continued its positive momentum since the beginning of the year with contract rate renewals at the highest level since first quarter 2022. While this trend is encouraging, present market conditions still do not support additional investment at this time as carriers are not being compensated for the value provided. Network results remain challenged as expected seasonality momentum was not sustained, and we are actively implementing strategies to enhance performance and drive improvement in this offering.”
- Operating Revenues $1.3 billion; $1.4 billion in 2023
- Income from Operations $43.1 million; $46.7 million in 2023
- Diluted Earnings per Share $0.17; Adjusted Diluted Earnings per Share $0.18
- Updated full year Adjusted Diluted Earnings per Share guidance to $0.66 – $0.72
- Updated full year Net Capital Expenditures guidance of approximately $330.0 million
“From an enterprise standpoint, lower year over year gains on equipment sales and equity investments represented in aggregate a $0.04 EPS headwind,” Rourke said. “Additionally, auto liability insurance costs increased by $10 million, a $0.04 EPS impact year over year due to higher premiums and increased settlement costs, despite reduced frequency of incidents. As we enter the holiday shipment season, I’d like to thank each of our associates, especially our professional drivers, for their tireless dedication and hard work. We are committed to maximizing shareholder value and advancing our enterprise for long-term success by delivering a seamless customer experience, disciplined execution of our commercial strategy, optimizing our capital allocation across our strategic growth areas, and diligent cost management.”
Enterprise Results
Enterprise income from operations for the third quarter of 2024 was $43.1 million, a decrease of $3.6 million, or 8%, compared to the same quarter in 2023. Diluted earnings per share in the third quarter of 2024 was $0.17 compared to $0.20 in the prior year. Adjusted diluted earnings per share was $0.18 in the third quarter of 2024 compared to $0.20 in the same period a year ago. Net gains on sales of transportation equipment and equity investments were $6.2 million and $2.3 million lower, respectively, compared to the same quarter in 2023, a $0.04 impact on earnings per share.
Cash Flow and Capitalization
At September 30, 2024, the Company had $263.7 million outstanding on total debt and finance lease obligations compared to $302.1 million as of December 31, 2023. The company had cash and cash equivalents of $179.0 million and $102.4 million as of September 30, 2024 and December 31, 2023, respectively.
The company’s cash provided by operating activities for the third quarter of 2024 increased year over year. Net capital expenditures were lower compared to the same period a year ago primarily due to reduced purchases of transportation equipment. Despite challenging freight market conditions, we have generated strong free cash flow. As of September 30, 2024, year to date free cash flow increased $154.2 million compared to the same period in 2023.
In February 2023, the company announced the approval of a $150.0 million stock repurchase program. As of Sept. 30, the company had repurchased a total of 3.8 million Class B shares for a total of $95.5 million under the program. In July the company’s Board of Directors declared a $0.095 dividend payable to shareholders of record as of Sept. 13 which was paid on Oct. 8 On Oct. 28, the company’s Board of Directors declared a $0.095 dividend payable to shareholders of record as of Dec. 13, 2024, expected to be paid on Jan. 8, 2025. As of Sept. 30 the Company had returned $49.9 million in the form of dividends to shareholders year to date.
Results of Operations – Reportable Segments
Truckload
Truckload revenues (excluding fuel surcharge) for the third quarter of 2024 were $532.2 million, a decrease of $3.1 million, or 1% compared to the same quarter in 2023 due to lower Network volumes, partially offset by Dedicated growth. Dedicated average truck count increased 4% due to new business growth while Network average truck count was down 12%. Truckload revenue per truck per week was $3,971, an increase of 2% compared to the same quarter in 2023. Both Dedicated and Network revenue per truck per week increased year over year.
Truckload income from operations was $23.7 million in the third quarter of 2024, a decrease of $0.8 million, or 3%, compared to the same quarter in 2023 primarily due to lower Network volumes, increased insurance expense, and decreased gains on sales of transportation equipment, offset by Dedicated growth. Truckload operating ratio was 95.5% in the third quarter of 2024 compared to 95.4% in the third quarter of 2023.
Intermodal
Intermodal revenues (excluding fuel surcharge) for the third quarter of 2024 were $264.7 million, an increase of $1.7 million, or 1%, compared to the same quarter in 2023, primarily due to volume growth. Revenue per order was $2,470, a slight increase year over year, due to changes in freight mix which impacted length of haul.
Intermodal income from operations for the third quarter of 2024 was $15.7 million, an increase of $4.6 million, or 41%, compared to the same quarter in 2023. In addition to the volume growth mentioned above, internal cost actions, network optimization, and improved dray productivity contributed to the increase in earnings. Intermodal operating ratio was 94.1% compared to 95.8% in the same quarter in 2023, an improvement of 170 basis points.
Logistics
Logistics revenues (excluding fuel surcharge) for the third quarter of 2024 were $313.7 million, a decrease of $12.3 million, or 4%, compared to the same quarter in 2023, primarily due to lower brokerage revenue per order. Brokerage volumes were down 1% year over year.
Logistics income from operations for the third quarter of 2024 was $7.6 million, a decrease of $0.9 million, or 11%, compared to the same quarter in 2023, primarily due to lower brokerage net revenue per order. Logistics operating ratio was 97.6% in the third quarter of 2024, compared to 97.4% in the third quarter of 2023.
“The strength of our balance sheet and actions taken to enhance our free cash flow enable us to allocate capital to our strategic priorities, including acquisitive growth,” said Darrell Campbell, vice president, and CFO of Schneider. “We continue to take measures to improve margins and capital returns, driving resilience and long-term enterprise value.We expect modest improvement in the fourth quarter over a year ago driven by continued stabilization across most of our businesses and improved seasonality, as we continue to position the enterprise for a more sustained market recovery. Based on our third quarter results and our shifted expectations of the timing of freight market improvement, we have updated our full year adjusted diluted earnings per share guidance to $0.66 – $0.72, which assumes a full year effective tax rate of 24.0%. Our updated net capital expenditures guidance is approximately $330 million.
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
