The truckload, intermodal and logistics services provider Schneider National Inc. reported its first earnings since going public last month, showing a decline in profitability, while another company has revised its earnings, pushing it into the red.

Net income for Wisconsin-based Schneider totaled $22.6 million in the first three months of 2017, a decrease of 19.8% compared to first quarter 2016 while revenue increased 8.4% to $1 billion.

Earnings per share were 14 cents in the most recent quarter compared to 18 cents a year earlier. Adjusted earnings were 15 cents, 2 cents better than a consensus estimate from analysts, while revenue was also better than expectations.

CEO Chris Lofgren said the company was “pleased” with its first quarter performance.

Schneider’s truckload segment reported revenue excluding fuel surcharge of $522.1 million, an increase of 6.4% compared to first quarter 2016. Income from operations was $38.5 million; a decrease of 8.7%.

The increase in revenue was attributed to the company’s purchase of Watkins & Shepard, and Lodeso in June 2016, but was partially offset by decreased freight volume in the company’s dedicated and for-hire standard businesses.

The decline in truckload income from operations was due to “unfavorable market conditions and increased driver and equipment costs, [with] operational efficiencies resulting from effective fleet sizing partially offset the earnings decrease,” Schneider said in a statement.

Intermodal revenue excluding fuel surcharge was $181.1 million; a decrease of 2% compared to first quarter 2016, while income from operations fell 6.4% to $6.6 million; a decrease of 6.4%. This happened as intermodal volume moved up 6.2% but was offset by a 7.7% decrease in revenue per order “driven by both a soft pricing environment and increased volume in the east and local west which have shorter lengths of haul.”

Schneider’s logistics revenue, excluding fuel surcharge totaled $183.9 million; an increase of 10.3% compared to a year earlier and income from operations moved up just 0.1% to $5.2 million.

“We anticipate the market pressures of first quarter 2017 to carry into the second quarter,” said Lofgren. “However, we expect improving market conditions in the second half of 2017 driven both by an improving freight market as well as concerns surrounding the impending electronic logging device mandate.”

Lawsuit Pushes Covenant Down for a First Quarter Loss

This news came a day after the parent to truckload carrier Covenant Transport and others has revised its first quarter earnings showing it moved from a profit to a loss due to a court decision.

Covenant Transportation Group, Inc. said that the U.S. District Court for the Southern District of Ohio issued a pre-trial decision against one of its subsidiaries relating to a cargo claim incurred in 2008. CTG did not reveal which of its operations the claim was against.

The court had previously ruled in favor of the plaintiff in 2014, and the prior decision was reversed in part by the Sixth Circuit Court of Appeals and remanded for further proceedings in 2015. The company is reviewing its options regarding further appeals.

Pending the outcome of further proceedings, the company has put aside $900,000 for legal costs, which will be recorded for the first quarter, due to Securities and Exchange Commission rules, even though the court ruling took place in the current and second quarter of the year.

Covenant previously announced net income for the first quarter of $0.5 million, or $0.03 per diluted share, down nearly 87% from a year earlier. The increased reserve will result in a net loss of approximately $39,000 for the first quarter or zero earnings per share.

This change is reflected in the company’s quarterly report filed with the Securities and Exchange Commission on Wednesday. 

The ultimate amount of the claim will depend on various interest rate, time period, legal cost, and other factors, as well as the success of any appeal, according to Covenant.

Evan Lockridge

Evan Lockridge

Business Contributing Editor

Trucking journalist since 1990, in the news business since early ‘80s.