Schneider National (NYSE: SNDR) announced a $2 per share special dividend on Thursday, answering the looming questions around how the company would deploy its growing cash position.
The announcement was included in the Green Bay, Wisconsin-based truckload (TL) carrier’s third-quarter report, which was in line with the adjusted earnings per share (EPS) consensus estimate of 31 cents. The result excluded a $13.1 million pretax charge for an adverse excise tax ruling on glider kits.
LINK TO FULL ARTICLE – Lackluster Q3 trends overshadow Schneider’s special dividend
“During the third quarter, recovery of freight volumes accelerated and demand in nearly all geographic markets exceeded capacity,” CEO and President Mark Rourke stated.
The special dividend, $355 million in total, represents less than half of the $769 million in cash on the balance sheet at the end of the quarter. In the past, management has pegged $250 million as a targeted cash balance. The payment is expected to be made to shareholders on Nov. 19. According to the company’s annual filing, the Schneider family and their trusts own approximately 70% of the total common stock outstanding and represents 94% of total voting power.
The TL division reported an 11% year-over-year decline in revenue excluding fuel surcharges due to a lack of capacity and the closure of the company’s First to Final Mile (FTFM) segment. Average tractor count declined 8% with revenue per truck per week dipping 3%. Pricing in the company’s network TL segment “built throughout the quarter with September yielding a mid-single-digit improvement year-over-year,” according to the release.
Increased exposure to the spot market and cost management drove 60 basis points of operating ratio (OR) improvement in the period at 90.1%. The year-over-year comparison excludes losses in FTFM.
Intermodal revenue was flat year-over-year with a modest decline in operating income. Logistics revenue increased 21% but operating income was constrained by increased capacity costs.
Management narrowed the 2020 adjusted EPS guidance range to $1.18 to $1.22, from $1.10 to $1.25. The current consensus estimate is $1.22.
“We believe market demand outpacing aggregate industry supply is a durable condition that will last for multiple quarters. We expect solid fundamentals in the fourth quarter of 2020, positioning us well as we enter 2021,” Rourke added.
The company will host a conference call to discuss these results at 10:30 a.m. EDT Thursday. Stay tuned to FreightWaves for more coverage on Schneider’s earnings report.
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