Roadrunner’s Q1 earnings fall short of expectations

The asset-light transportation and logistics services provider posted earnings per share of $0.08, well short of industry advisory firm Stifel’s estimate of $0.22 per share and the street consensus estimate of $0.23 per share.    Roadrunner Transportation Systems, Inc.’s net income plummeted 77.5 percent year-over-year for the first quarter of 2016 to $3.1 million, according to the company’s most recent unaudited financial statements.
   The Cudahy, Wis.-based asset-light transportation and logistics services provider reported earnings per share (EPS) of $0.08 per share for the quarter, falling short of industry advisory firm Stifel’s estimate of $0.22 per share and the street consensus estimate of $0.23 per share, Stifel said.
   “During the quarter, we incurred $3.0 million of downsizing costs in our truckload and less-than-truckload (LTL) segments ($0.05 impact on diluted earnings per share),” Roadrunner CEO Mark DiBlasi said. “We would expect a similar amount of downsizing costs in the second quarter of 2016.”
   Revenues for the quarter dropped 4.8 percent year-over-year to $465.6 million. The decline primarily resulted from the drop in fuel surcharge revenues, along with a decrease in freight rates and volumes across most end markets, net of new business, DiBlasi explained.
   Meanwhile, operating income for the quarter tumbled 60.4 percent from the first quarter of 2015 to $10.6 million.
   Overall operating income was hindered by the truckload logistics segment, which saw a 61.9 percent year-over-year drop in operating income to $5.9 million, largely due to margin reductions in the OEM ground and air expedite business, where excess capacity in both modes lead to low rates and a $4.8 million decline in operating income. The segment’s lower operating income also resulted from $2.3 million of costs incurred to downsize operations due to volumes declines.
   On the flip side, revenues in the truckload logistics segment inched up 0.7 percent from the first quarter of 2015 to $273.8 million, primarily due to increases in expedited ground freight brokerage, which were partially offset by lower fuel surcharge revenues.
   The LTL segment saw revenues fall 13.8 percent year-over-year to $113.4 million, due to lower fuel surcharge revenues and weak freight demand in the general industrial markets served by the company.
   Revenues in the global solutions segment dropped 10.6 percent from the first quarter of 2015 to $82.9 million. Roadrunner primarily attributed the decline to lower volumes and rates in the international freight forwarding and domestic freight management businesses, which were partially offset by increases in the warehousing and consolidation business.
   “Due to margin reductions in our OEM ground and air expedite business and declining rates across most end markets, we expect to achieve EBITDA, excluding downsizing costs of approximately $6.0 million, in the range of $130 million to $140 million for 2016 and anticipate diluted earnings per share available to common stockholders, excluding the impact of downsizing costs of approximately $0.10, to be in the range of $1.10 to $1.25 for 2016,” Roadrunner CFO Peter Armbruster said in a statement.