Trimble Inc. on Wednesday reported transportation revenue decreased 9.9% year over year (y/y) to $155 million during the third quarter.
The company’s transportation segment was negatively impacted by declining spot rates in the commercial trucking industry, said Rob Painter, Trimble’s president and CEO.
“Although spot rates in the truckload market have softened due to normalizing demand, freight volumes remain steady along with contract rates,” Painter said during an earnings call with analysts Wednesday before the stock market opened. “Higher fuel prices continue to inflate overall fuel costs, yet trucking margins have remained relatively healthy due to the strength of freight demand.”
Trimble (NASDAQ: TRMB) reported third-quarter adjusted earnings per share of 66 cents and revenue of $884.9 million. The results matched Wall Street consensus estimates of 66 cents per share but missed revenue estimates of $910.8 million.
The company’s adjusted operating income in the third quarter decreased by 2% y/y to $209.9 million.
Trimble is a provider of technology solutions for trucking companies, freight brokerages and 3PLs. In addition to transportation, the company also also operates in industries such as buildings and infrastructure, geospatial, and resources and utilities.
For the year, the company’s guidance outlook calls for adjusted revenue of up to $3.71 billion and adjusted earnings per share of up to $2.67. The revised outlook is lower than the full-year outlook Trimble provided during the second quarter, when the company’s guidance was $3.76 billion to $3.82 billion in revenue and adjusted earnings per share of up to $2.80.
North America remains Trimble’s largest market by revenue during Q3 at $488 million, a 6% increase compared with Q3 2021.
In recent months, Trimble changed its headquarters from Sunnyvale, California, to Westminster, Colorado. The company also announced that senior vice president Ron Bisio will lead the transportation division.
Trimble executives remain optimistic about 2022 and 2023 overall.
“In the fourth quarter [of 2022] in the transportation segment, we expect the growth rate to improve sequentially,” Trimble Chief Financial Officer David Barnes said during the call. “Annual recurring revenue (ARR) growth in transportation should remain relatively consistent with recent trends in each of our segments. We expect to issue 2023 guidance in February, but at this point we anticipate a 2023 outlook for double-digit ARR growth and strong cash-flow generation.”
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