Transportation and logistics company benefits from strong LTL market, but Stifel cites lack of focus as a hindrance to more growth.
The trucking and third-party logistics services provider Roadrunner Transportation Systems said Wednesday that its third quarter operating profit rose 6.8 percent, year-over-year, to $25.3 million.
The company’s revenue rose 37.2 percent, year-over-year, to $498.1 million in the third quarter. For the year, revenue is up 34.8 percent to $1.3 billion, while operating profit is up 6.4 percent to $71.5 million.
Roadrunner Chief Financial Officer Peter Armbruster said the company anticipates fourth quarter revenue to be in the range of $475 million to $500 million, representing an increase of 29 percent to 36 percent from the fourth quarter of 2013.
In an note to investors Thursday, the investment bank Stifel said that while Roadrunner is making money, it lacks a clear strategic vision.
“There are good businesses within the underlying Roadrunner portfolio, and the company does make money (although free cash flow has been disappointing),” Stifel’s Transportation and Logistics Research Group said. “With a renewed focus on its LTL division, the company could significantly improve its earnings, in our view, as it is a very positive environment for LTL carriers right now (which should continue into 2015). Furthermore, with fewer acquisitions and an accelerated organic growth rate, we believe Roadrunner could start to exceed expectations at some point in 2015.”
Stifel noted Roadrunner is also hampered by poor visibility to its truckload business and high debt levels.
Roadrunner profit up 6% in Q3
