Schneider National(US:SNDR)2021-10-28 20:48Financial Data and Key Metrics Changes - The company reported a record EPS of $0.62 for Q3 2021, surpassing the previous record of $0.60 set in the prior quarter [8] - Enterprise revenues, excluding fuel surcharge, reached $1.3 billion, a 25% increase year-over-year [9] - Adjusted operating income doubled year-over-year, with truckload earnings up 87%, intermodal up 99%, and logistics up 143% [10] Business Line Data and Key Metrics Changes - Truckload segment earnings increased by 87% [10] - Intermodal segment saw a 1% growth in order count and a 20% increase in revenue per order [15] - Logistics revenue reached $475 million, only $10 million less than truck segment revenues, with improved operating ratios [18] Market Data and Key Metrics Changes - The company expects revenue excluding fuel surcharge to exceed $5 billion for the full year [11] - The operating income is projected to top $500 million [11] - The company anticipates a lower equipment gain in Q4 compared to Q3 due to reduced equipment sales [68] Company Strategy and Development Direction - The company is focused on growing its multimodal portfolio and enhancing its asset-light offerings in intermodal and logistics, which now comprise 44% of segment earnings [10] - Strategic growth offerings include dedicated truck, intermodal, and brokerage, with a focus on increasing container counts and improving operational efficiency [14][20] - The company is investing in technology to enhance customer experience and streamline operations [57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining pricing momentum into 2022, despite potential inflationary pressures [26] - The company is optimistic about growth prospects in dedicated and intermodal services, with expectations for continued strong performance [20][26] - Management highlighted the importance of addressing supply chain challenges and maintaining a healthy demand environment [43] Other Important Information - The company has lowered its CapEx guidance to about $300 million due to higher proceeds from equipment sales and delayed deliveries [12] - Management is actively preparing for potential vaccine mandates and is encouraging vaccination among its workforce [52] Q&A Session All Questions and Answers Question: How does the company view 2022 in terms of pricing dynamics and fleet count? - Management is optimistic about pricing momentum and expects to carry that into 2022, with a focus on dedicated growth and improved asset utilization [24][26] Question: What are the expectations for truckload and intermodal pricing into next year? - Management noted that contract renewals are trending positively, with expectations for continued price increases in both segments [34] Question: What is the outlook for intermodal volume growth in 2022? - Management anticipates gradual improvement in intermodal volumes as supply chain issues are addressed, with confidence in dray performance and container builds [90] Question: How is the company addressing labor challenges in the dedicated and dray markets? - Management indicated that dedicated and intermodal configurations are more attractive to drivers, leading to better retention and recruitment [59] Question: What is the company's strategy regarding the FreightPower platform? - The company is focused on expanding its FreightPower platform to enhance service offerings and reach more customers effectively [50] Question: How does the company plan to utilize cash generated in the upcoming quarters? - The company plans to focus on organic growth in strategic areas and explore inorganic opportunities that align with its portfolio [57] Question: What are the expectations for the brokerage business and the impact of power-only services? - Management highlighted that power-only services are gaining traction but still represent a smaller portion of overall brokerage growth [94]