Q3 2023 Earnings Analysis: CH Robinson, Schneider, Werner

We're shedding light on the Q3 2023 earnings reports from major freight and logistics players: C.H. Robinson, Werner Enterprises, and Schneider National. Each reveals unique challenges and strategies, with some navigating better than others amidst a turbulent market landscape. Cost-cutting, acquisitions, and changing investor sentiment form the backdrop, while smaller entities like Trimble and Nikola provide contrasting narratives.

C.H. Robinson Worldwide, Inc. (CHRW) -52.8% EPS YoY

• Key Metrics: Revenue down 27.8% compared to the third quarter of the previous year. Gross profits decreased by almost 29%. Total operating expenses decreased by 13.1%, while income from operations fell by 60.5%.

• Post-market Price: Rose by almost 4% in the first hour after the earnings release.

• Investor Sentiment: Wall Street reacted positively to the earnings, appreciating cost-cutting measures. However, Deutsche Bank's Amit Mehrotra expressed skepticism, questioning the true impact of these reductions on revenue and profitability.

Werner Enterprises (WERN) -53% EPS YoY

• Key Metrics: Experienced a slight 1.2% decrease in revenue YoY. Adjusted operating income was $42 million, a decrease of 47% YoY.

• Logistics Metrics: Revenue increased by 23% to $230.3 million, primarily attributed to truckload logistics operations revenue, which saw a 48% rise due to the ReedTMS acquisition in November 2022.

• Investor Sentiment: Mixed due to EPS falling short of expectations. Analysts have revised their earnings downwards for the upcoming period, and the stock has seen a significant fall over the last three months, trading near its 52-week low. Despite a challenging freight environment, CEO Derek Leathers described Werner's business model as durable and resilient.

Schneider National (SNDR) -71.43% EPS YoY

• Key Metrics: Big earnings miss reported. Q3 2023 sales of $1,352 million, down 19.3% YoY, with ongoing price pressures and challenges like fuel and bad debt impacting operating income. Income from operations has seen a significant decline of 68%

• Logistics Metrics: Revenue decreased by 30% YoY to $326 million, with brokerage loads experiencing an 11% decline.

• Investor Sentiment: With Schneider cutting its 2023 EPS guidance by 22% from last quarter's forecast, investor sentiment will likely be negative. Additionally, the company expects 2024 to be a "transition year."

Quick Hits:

Trimble (TRMB): Q3 transportation revenue rose to $196.6 million, a 35% y/y increase, with earnings of 68 cents per share, beating Wall Street's expectations.

Nikola (NKLA): Net loss of $425.8 million– an increase of 80.3% YoY– after recalling all 209 battery-powered trucks, shipping only three trucks compared to 63 the previous year.