Wabash National Corporation’s (NYSE: WNC) second-quarter report included record revenue for a quarter ($486.2 million) but earnings of $0.24 per share that fell short of the $0.26 that analysts expected.
The record revenue came in nearly $10 million ahead of the $476.45 million analysts were expecting.
Xiang Xu of tickrwatch.com analyzed what it means for the stock price:
Over the past week, shares of WNC have risen 0.37% in price, which could bias the coming move in the stock. Thus far, the analysts covering the firm have had high expectations as most of them hold Buy ratings on the stock.
Second quarter 2014 non-GAAP adjusted earnings were $16.9 million, or $0.24 per diluted share, after excluding $1.1 million of charges related to both the early extinguishment of debt incurred with the company's term loan pre-payment of $20 million in June 2014 and the transition of three retail branch locations to independent dealer facilities. The company's prior year period results included the impact of non-recurring acquisition expenses and early extinguishment of debt charges related to a $20 million term loan prepayment made in May 2013. Excluding the impact of these items, non-GAAP adjusted earnings for the second quarter of 2013 were $14.7 million, or $0.21 per diluted share.
For the second quarter of 2014, the company's net sales increased 18 percent to $486 million from $413 million in the prior year quarter, and operating income increased 11 percent to $33.9 million compared to $30.5 million for the second quarter of 2013. Operating EBITDA, a non-GAAP measure that excludes the effects of certain recurring and non-recurring items, was $45.7 million for the second quarter of 2014, an increase of $3.4 million compared to the prior year period.
"We are again pleased with the results for the second quarter and the continued strong performance of the business, particularly in our Commercial Trailer Products segment,” said Dick Giromini, president and chief executive officer. “We continue to set new quarterly records for operating performance, as evidenced by our revenue, operating income and operating EBITDA results during the second quarter. These achievements substantiate the transformative nature of our growth and diversification initiatives.
"New trailer shipments for the second quarter were approximately 14,950, exceeding our previous guidance of 13,500 to 14,500 trailers, as customer pickups gained significant momentum. We anticipate continued strength in customer demand throughout the remainder of 2014, as total new trailer shipments for the full year are now expected to be in the range of 53,000 to 55,000 units, representing increases of approximately 13 percent to 18 percent from the prior year. Our backlog grew to a cyclical high of $842 million as of June 30, 2014, an increase of $162 million, or 24 percent, from the prior year period. Additionally, current industry forecasts support strong demand levels with projections well above replacement demand and exceeding previous year levels, setting up the potential for 2014 to exceed the record performance achieved last year."
Commercial Trailer Products' net sales, prior to the elimination of intersegment sales, increased $70 million, or 26.3 percent, on shipments of 13,900 trailers, or 3,200 more trailers than the prior year period. This increase in revenue was primarily due to the 29.9 percent increase in trailer shipments during the quarter, offset by an unfavorable customer and product mix, which lowered average selling prices by 2.2 percent compared to the prior year period.
Driven by higher volumes and improved pricing, gross profit and gross profit margin increased $7.7 million and 70 basis points, respectively, as compared to the same period last year. Operating income increased by $8.5 million, or 58.6 percent, to $23.1 million as compared to the second quarter last year, due to increased volume, improved pricing and continued operational improvements.
Diversified Products' net sales, prior to the elimination of intersegment sales, totaled $135 million for the second quarter of 2014, consistent with the prior year period, as the increase in tank trailer shipments was offset by delayed shipments of non-trailer truck mounted equipment and other engineered products. Gross profit and gross profit margin declined $6.6 million and 480 basis points, respectively, compared to the prior year period, primarily due to higher raw material costs related to wood flooring operations, new product start-up costs and unfavorable product mix within the Company's Wabash Composites and Walker Group businesses. Operating income for the second quarter of 2014 was $12.7 million, or 9.4 percent of net sales, a decrease of $6.5 million as compared to the same period last year.
Retail's net sales, prior to the elimination of intersegment sales, increased 7.2 percent to $52 million, compared to $48 million in the prior year period, due to increased shipments of new trailers and continued strong demand for parts and services. Gross profit margin declined 40 basis points compared to the prior year period to 11.1 percent as the continued strong demand across each of Retail's product lines was offset by higher cost of services required to support our strategic growth initiatives. Operating income for the second quarter of 2014 was $1.3 million, consistent with the same period last year, as increased volumes were offset by higher selling and administrative expenses related to our strategic growth initiatives.