(Adds details from analyst note, capex estimates)
By Eric M. Johnson
Nov 7 (Reuters) - U.S. trucking firm Schneider National Inc on Tuesday posted a quarterly profit below expectations, hurt by higher costs for recruiting and retaining drivers and the impact of hurricanes in August and September.
The Green Bay, Wisconsin-based company reported third-quarter earnings of $36.9 million, or $0.21 per diluted share, compared to $36.8 million, or $0.24 per diluted share in the year-ago period.
Revenue for the quarter was $1.1 billion compared to $1.05 billion a year ago, in line with analyst expectations.
Adjusted for one-time items, the company reported earnings per share of $0.23. Wall Street analysts had expected $0.25 per share.
In a research note, Credit Suisse analyst Allison Landry said Schneider posted a “significant Q3 miss.”
“We view this release as negative given that Q3 EBIT (pre-tax earnings) missed Street estimates by 10 percent. Additionally, we note that (Schneider) lowered full-year EPS guidance.”
Management cut its full-year 2017 adjusted diluted earnings to a range of $0.92 to $0.97 per share, from an earlier range of $0.94 to $1.02 per share.
Schneider Chief Executive Officer Chris Lofgren said in a statement that better pricing due to an improved economy and other factors was offset by the higher costs of recruiting and paying drivers, investments in its “final mile” delivery services to residences, and lost revenue and productivity from hurricanes.
A shortage of truck drivers, exacerbated by a tight labor market, is weighing on freight haulers across the country. On Monday, Knight-Swift Transportation Holdings Inc posted a lower quarterly profit due to higher costs for recruiting and paying drivers as well as its recent merger.
Schneider said hurricanes that hit southern states in August and September brought down earnings by $3 million due to lost revenue and productivity, and increased maintenance and other costs, which were offset by improved pricing for the freight it carries amid market volatility.
“Overall, we expect market strengthening to continue for the foreseeable future, especially given the significant amount of building materials that will need to be moved into Texas, Florida and the Southeastern part of the U.S. (due to the hurricanes), as well as the enforcement of the ELD mandate.”
U.S. trucking firms are facing a new federal regulation starting this December requiring truckers to electronically log hours of service instead of using paper logs. Paper logs allow truckers to fudge the books, inflating their hours on the road and boosting the bottom line.
The biggest truck firms, including Schneider National, back the rule and have used electronic logs for years. (Reporting by Eric M. Johnson in Seattle; Editing by Chizu Nomiyama and Paul Simao)