Group 1 - Google is making slight changes within teams to enhance collaboration and improve the ability to serve customers quickly and effectively [1]

Vestis (VSTS) Q2 2025 Earnings Call May 07, 2025 09:00 AM ET Speaker0 Welcome to the Vestas Corporation Fiscal Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants have been placed on a listen only mode and the floor will be open for your questions following the presentation. I would now like to turn the call over to Michael Aurelio, Vice President, Investor Relations. Speaker1 Thank you, operator, and thank you all for joining us. With me are Philip Holliman, Interim E ...

Financial Data and Key Metrics Changes - The company reported an 8% growth in EPS on an adjusted basis, driven by $55 million in labor productivity savings despite incurring $35 million in storm restoration costs [6][7][28] - The operating ratio for the quarter was 67.9, which includes 120 basis points from storm restoration costs, reflecting a 200 basis point improvement year over year [28][29] - Net income and EPS improved by 8% year over year, with operating expenses down 3% on higher volumes [31] Business Line Data and Key Metrics Changes - Overall volume rose 1% year over year, with total revenue flat; however, total revenue less fuel was up 2% [21] - Merchandise volume fell due to weakness in metals and construction, while chemicals and agriculture saw gains [21] - Intermodal volume increased by 3% year over year, with slight RPU growth due to stabilization in truck pricing [22] Market Data and Key Metrics Changes - The company expects strength in the auto sector in the near term, although tariffs could pose a headwind [23] - Continued strength in chemicals markets is anticipated, with a focus on recapturing market share [24] - Coal prices remain pressured, with expectations of tempered production amid uncertainty around export trade [25] Company Strategy and Development Direction - The company is focused on safety, network performance, customer service, and cost control as part of its operational strategy [9] - The PSR 2.0 transformation is aimed at unlocking network value and delivering on financial commitments, with a zero-based operating plan being implemented [17][20] - The company is committed to maintaining quality service and is actively working to regain market share lost to competitors [68] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by severe winter weather but expressed confidence in the company's ability to navigate these disruptions [5][6] - The company reiterated its full-year guidance of 3% revenue growth and 150 basis points of operating ratio improvement, while acknowledging uncertainty due to tariffs and economic conditions [32][33] - Management emphasized the importance of staying close to customers to adapt to changing market conditions and to capitalize on opportunities [26][33] Other Important Information - The company has resumed share repurchases, buying back nearly $250 million of shares in the quarter [31] - Insurance recoveries related to an incident in Eastern Ohio provided a net benefit of $185 million in the quarter [28] Q&A Session Summary Question: Operating ratio performance and targets - The management discussed the operating ratio and the impact of cost savings, indicating that the second quarter should see improvements [35][36] Question: Yield and pricing environment - Management noted that merchandise yields increased due to improved service, while intermodal pricing remains flat [42][45] Question: Cost management in a declining volume scenario - Management expressed confidence in their ability to manage costs effectively, even in a scenario of declining volumes [52][56] Question: Land sale timing and network performance - The company expects land sales to remain in the $30 million to $40 million range for the year, with network performance recovering well [61][64] Question: Share gains and tariff impacts - Management highlighted progress in regaining market share and discussed the potential mixed impacts of tariffs on different segments [112][114]