Activity at the Wabash National manufacturing facility. The Lafayette, Ind., company’s net sales in the most recent quarter totaled $686.6 million. (Luke Sharrett/Bloomberg News)
Wabash National posted net income of $74.3 million, or $1.54 per diluted share, in the second quarter of 2023, compared with a $22.6 million, or 46 cents-per-share profit, in the same period a year earlier, the trailer manufacturer said July 26.
Lafayette, Ind.-based Wabash’s net sales in the most recent quarter totaled $686.6 million, a 6.8% increase compared with $642.8 million in the same quarter a year earlier.
The company’s operating income for the most recent three-month period came in at $103 million, representing 15% of sales for the quarter, compared with $35.9 million or 5.6% in the year-ago period.
The results exceeded prior expectations, the company said, and were largely the result of strong material margins, a favorable product mix and strong results from parts and services, tanks and truck bodies.
Yeagy
Wabash shipped 11,825 trailers in the second quarter of 2023 compared with 13,670 with the 2022 period and delivered 4,025 truck bodies compared with 3,950 a year earlier.
During the quarterly earnings call, CEO Brent Yeagy said the numbers were in line with average seasonality. The company also shipped 15 used trailers in the most recent period, less than half the 40 shipped in the 2022 period.
Chief Financial Officer Mike Pettit said that shipments came in lower than the company had expected three months earlier. He said that in response to the demand situation, Wabash decided to moderately slow rates of production by removing Saturday shifts at the main trailer manufacturing facility. Pettit added that all full-time employees had been retained so Wabash can respond to any recovery in the markets.
He said during the call that Wabash expects a recovery in demand and production levels in the coming quarter, but Saturday overtime will likely not return. Freight and trailer markets are going to see a normalization in the final two quarters of the year, he added.
Wabash shipped 23,610 trailers in the first half of 2023 compared with 25,535 a year earlier, and 7,835 truck bodies compared with 7,435 in the year-ago period. It shipped 30 used trailers, half the 60 shipped the year prior.
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As of June 30, the backlog stood at approximately $2.4 billion, an increase of 5% compared with the same point in 2022. The company said backlog expected to be shipped in the following 12 months amounted to around $2.1 billion.
Wabash’s quarterly earnings beat the Zacks Consensus Estimate of $1.32 per share.
“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,” Yeagy said in a statement.
“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. We view the return to more normal seasonality during this year’s peak season for freight as a potentially significant turning point,” he added.
Yeagy said what he termed remarkable results raised the bar on what Wabash assumes peak earnings can be. He added that the record results were achieved on annual shipment volumes that were 20% below capacity.
Pettit said he expects the strongest second half in the company’s history, even though it will not be as good a half as the first half. Yeagy added that the company’s prospects in the coming years were even better, noting that not a lot of capacity was being added in freight markets at the moment, so a scarcity of capacity was coming in a couple of years’ time.
Wabash, meanwhile, updated its revenue outlook for the full year ending Dec. 31 to a range of $2.6 billion to $2.8 billion from a range of $2.8 billion to $3 billion three months earlier. The company increased its EPS guidance to a range of $4.25 to $4.65 from $4 to $4.50.
After the release of the results, the company’s share price weakened, declining more than 4% as July 26 trading progressed.
