Trailer and body builder Wabash reported record second-quarter earnings despite lower trailer deliveries and only a modest increase in truck body deliveries.
Highlights included:
Quarterly revenue of $686.6 million, up 6.8% from $642.7 million a year ago.
Record operating income of $103 million with an operating margin of 15% on strong material margin and favorable product mix.
Gross profit of $151 million equaled 22% of sales.
Record quarterly earnings per share of $1.54 compared to 46 cents a year ago.
Strong total backlog of $2.4 billion, up 5% from the comparable quarter in 2022.
“Our execution during the first half of this year already positions 2023 as our best year in terms of financial achievements and we expect our backlog to support a strong second half,” CEO Brent Yeagy said in a news release Wenesday.
Wabash pointed to material margin, favorable product mix and strong results from parts and services, tanks and truck bodies.
‘Changes that will endure’
“These financial results further reinforce our belief that Wabash’s earnings power is structurally higher than previously anticipated,” Yeagy said. “These are changes that will endure at any phase of the business cycle and we expect to continue to raise both the floor and ceiling of our earnings profile going forward.”
The fall in per-mile shipping rates has led to some order cancellations. Wabash delivered 11,825 trailers in the April-June period compared to 13,670 a year ago. Truck body deliveries rose to 4,025 from 3,950.
“As we continue to track the challenging market conditions affecting our customers, we look forward to improvement in freight rates as capacity and demand align more favorably,” Yeagy said.
Wabash expects normal seasonality to return during this year’s peak season for freight.
The seasonally adjusted backlog-to-build ratio fell to 7.1 months in June compared to 8.5 months last June, ACT Research reported Tuesday. At the current backlog levels, the industry has build commitments in the beginning of 2024.
Wabash expects to ship $2.1 billion of its backlog within the next 12 months.
Editor’s Note: Updates with further quarterly material.
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