Wabash Q1 Profit Jumps as Sales, Order Backlog Soar
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Profits at trailer manufacturer Wabash jumped year-over-year in the three months ending March 31 as sales and margins rose while order backlog soared, winning plaudits from analysts on the company’s earnings call April 26.
Lafayette, Ind.-based Wabash posted net income of $51.21 million, or $1.04 per diluted share, in the most recent quarter, compared with $12.07 million, 24 cents, in the year-ago period, it said in a statement April 26.
Net sales for the first quarter of 2023 of $621 million increased 13.6% year-over-year. Margins exceeded prior expectations as a result of strong material margin, operational efficiency and product mix, the company said.
Wabash’s order backlog as of March 31 was about $3.1 billion, an increase of 31% compared with the end of the first quarter of 2022, a first-quarter record. Backlog expected to be shipped within the following 12 months was around $2.6 billion on March 31, it said.
Yeagy
“Our backlog remains strong and, combined with our first-quarter performance, gives us confidence to guide to a record year,” Wabash CEO Brent Yeagy said in the statement. “With freight rates pressured and uncertainty regarding the timing of a market rebound, we expect customers to diligently manage capital spending, but remain optimistic about their prioritization of van trailers and we continue to be excited about the strength in our tank trailer, truck body, and parts and services businesses.”
The company’s tank trailer sales in the first quarter rose 29% year-over-year, he said during the earnings call, adding that truck body sales were benefiting from the industry working through chassis constraints. Tank trailer sales posted an all-time quarterly record in the first three months of 2023, he added.
Just as positively, Yeagy said on the call, tank trailer and truck body sales are set to increase through the remainder of 2023. In addition, supply chain problems are starting to diminish after three years of being a drag on Wabash’s performance, he said.
Still, Chief Financial Officer Mike Pettit warned on the call that Wabash would continue to keep an eye on costs. Steel prices have risen since the start of 2023 on supply concerns, data shows.
Wabash shipped a total of 15,595 new units in the most recent quarter, with 11,780 of that total trailers and 3,815 truck bodies, it said. In the year-ago period, the company shipped 11,865 trailers and 3,485 truck bodies.
Ryerson has supplied Wabash with steel, stainless steel, and aluminum for more than 10 years. (Ryerson)
The increase in earnings also comes after Wabash announced two long-term agreements in January, one with a carrier to create an extended backlog and one with a supplier to enhance supply surety.
Wabash and Ryerson, a value-added processor and distributor of industrial metals, reached a 10-year agreement. Wabash previously inked a deal with aluminum supplier Hydro, to provide certainty that it can meet pent-up demand as its additional dry van capacity in Lafayette, Ind., comes online in 2023.
The dry van facility is set to begin production in the next couple of weeks, Yeagy said during the earnings call. Production is likely to be slow to get underway in the second quarter, see a substantial ramp-up in the third quarter, and near capacity by the final three months of 2023, he said.
Wabash reached a multiyear supply agreement with J.B. Hunt Transport Services in January. J.B. Hunt ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
Wabash’s transportation solutions unit posted net sales for the first quarter of $578.1 million, a year-over-year increase of 15.1%. Its parts and services unit reported net sales for the quarter of $47.1 million, an increase of 0.9% compared with the prior-year quarter.
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