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ELDs are drag on Trimble’s fourth-quarter earnings

ELDs are proving to be a headwind at Trimble. 

In releasing the company’s fourth-quarter 2019 earnings Wednesday, executives at Trimble (NASDAQ: TRMB) on a conference call with analysts discussed how there has been a need for extensive investment in the company’s ELD operations and that it has impacted the bottom line. The transportation division is just one of several at Trimble, a technology company that has products cutting across several industries, including buildings and infrastructure and geospatial.

The transportation group’s results “are not to our standard,” CEO Rob Painter said on the call, according to a transcript provided by Seeking Alpha. “Meeting the demands of the ELD mandate proved harder than originally expected.”

Painter did say that software was not a problem. “We elected the right software for both our older hardware technology as well as our newer hardware platforms.” 

Although ELDs are not the only activity in Trimble’s transportation segment, the weakness of the group was clear in the quarterly report. Though revenue increased to $206.1 million from $197 million, non-GAAP operating income before corporate allocations fell to $30.6 million from $44.4 million. Margins declined to 14.8% from 15.9%.

“Supporting multiple platforms has proven to be a larger than anticipated R&D and customer migration support effort,” Painter said. “This resulted in higher expenses and customer churn, which is negatively impacting margins and (annual run rate).”

Painter said Trimble has “brought a number of new leaders into the business and we are more proactively migrating customers from old technology platforms to new technology platforms.” 

The financial guidance provided by Trimble called for first-quarter negative growth of minus 3% year-on-year. While the impact of the coronavirus was cited as a main cause, it also pointed to “costs associated with meeting the demands of the ELD mandate.” 

David Barnes, Trimble’s CFO, also cited in his forecast “incremental costs primarily in the first half of the year to upgrade customers to newer technology platforms related to the ELD mandate.”

In response to a question from Ann Duignan of J.P. Morgan, Painter said the transportation segment had “5 points to 6 points of degradation” because of ELD costs.

Painter cited three factors hitting ELDs: a “compressing” of hardware margins “toward the end of the second phase of the mandate going into effect,” presumably the end of the automatic on-board recording device (AOBRD) exemption in December; a set of one-time costs “like over-the-air updates, which drive cellular bills up”; and a “bit of a churn in the business that hit the fourth quarter.”

The outlook for 2020 is for the ELD business to continue to be a drag, Painter said. Revenue and profitability for the company as a whole won’t be much different this year than last year, even though there are segments that are “improving and growing,” he said. But there will be “somewhat of an offset in the ELD side which neutralizes that.”

Efforts have been undertaken to right the business “that’s all in the service of getting the 2021 results in line and protecting the long tail subscriber base that we have.”

Trimble made a significant acquisition last month when it acquired Kueblix. The broad goal driving the acquisition was integration of Trimble’s transportation business, aimed at carriers, with the extensive network of shippers served by Kueblix.

Painter said had Trimble not acquired Kueblix, it would have attempted such an integration backward into the shipper network. “The next logical place … is this connectivity between the shipper and the carrier,” he said. In the short term, the Kueblix acquisition will be negative to earnings, Painter added, but it is another step in Trimble’s digitization drive. 

Despite the drag from the ELD business, Trimble overall did well. Its non-GAAP operating income was up 4% from the fourth quarter of 2018. Its non-GAAP operating margin was down slightly to 21.6% from 21.7%, and the drop in ELD margin would have been a factor there. Non-GAAP net income was $134.1 million and that was up 10% from 2018’s fourth quarter.


  1. So the article quotes a Trimble CEO, “we elected the right software for both our older hardware technology as well as our newer hardware platforms”.
    From where I’m sitting, that sounds like a heaping pile of BS! Since early January I’ve seen nothing but software issues with the new peoplenet led units. About 30% of the time I (aswell as my co-workers) have to deal with a variety of eld issues that are time consuming to resolve. And that’s the least of the problems we experience. One of our driver’s went through a dot check and was not able to upload his logs for the officer to review. Not good! And this issue has yet to be resolved.
    That’s just one example and that’s just my employer. Multiply these problems by many hundreds of other companies who have bought into Trimbles nightmare and its no wonder they’re experiencing 4th quarter loses, which I expect will continue.

  2. Sorry your profits are down. Lol. This is because this is a joke. It doesn’t work well. Calling in for help is 190 minutes wait time. Really! Your taking money from our family’s. Dead stopped in our tracks, because of poor eld. We can’t get our trucks cleaned or even restock at the gate until we log in. While we are on the” clock” nothing else is. Losing time between loads. I may not believe you took into account the many things that happened.

  3. Well I was a trucker for 20years still have my CDL did elds help trucking no it didn’t. It caused more issues with parking loading unloading and etc. I gotta be honest if they just eliminate elds logs books trucking be a whole lot safer yea I know some might say it will not but look at what’s going on now they got elds logs books haven’t helped the situation none. If you not being pushed you can concentrate more on driving safety aka dark vaider

  4. Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & PROSPER ! IMHO says:

    ELD’s are not just a drag on Trimble’s fourth-quarter earnings .

    They’re a drag on many TRUCK DRIVERS as well !


    1. Give these drivers more time these trucks is not a toy 80000 pounds. Been doing it for 38yr safety. It takes time to do this job if you are not ready then don’t do it.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.