A half-billion dollar trailer accident judgment against Wabash continues to skew the company’s quarterly earnings reports—and for the better in Q1.
While Wabash net sales for the first quarter of 2025 were $380.9 million, a 26.1% decrease compared to the same quarter last year, the company generated consolidated gross profit of $19 million. Operating profit amounted to $314.6 million as the company recognized a $342 million gain in connection with the reduction of the 2024 legal verdict. Without the adjustment, operating loss was $27.4 million for the quarter.
"While the reduction in this verdict was a positive development in our efforts to bring this matter to a more reasonable conclusion, there is more work to do, highlighted by our recent filing of notice of appeal,” said Brent Yeagy, president and chief executive officer. “Excluding the gain, non-GAAP adjusted EPS came in below our expectations amid a general weakening in market conditions.
“We have since reduced direct labor to align cost with market conditions. While tariff-related uncertainty has caused customers to delay equipment investment decisions, it's important to highlight the growth in our Parts & Services segment, which we see as an important longer-term source of stability for our portfolio."
As of March 31, total Company backlog stood at approximately $1.2 billion, a sequential increase of 5% from year-end 2024 and a decrease of 32% compared to the first quarter of 2024 as new order activity remained modest.
For the full-year, the company reduced its revenue outlook to roughly $1.8 billion, compared to $1.95 billion in 2024 and $2.54 billion in 2023.
During the first quarter, Transportation Solutions generated net sales of $346.8 million, a decrease of 26.3% compared to the same quarter of the previous year. Operating loss for the quarter amounted to $9.8 million.
Parts & Services' net sales for the first quarter were $52 million, an increase of 5.5% compared to the prior year quarter. Operating income for the quarter amounted to $6.9 million.
For Q1, Wabash shipped 6,290 new trailers, compared to 8,500 trailers for the period last year. Truck body shipments for the quarter were 3,000, down from 3,690.
“Wabash's manufacturing footprint and our supply base are both heavily levered to the United States positioning us to avoid direct impact from tariffs. However, second order tariff effects have been meaningful in the short-term as customers have reduced capital expenditure plans until their own customers' have greater clarity," Yeagy said. "As a result of the weaker than anticipated first quarter and softer outlook, we have reduced our full year guidance.
“As we look further forward, we believe it's important for the medium term to point out that demand in 2025 is currently projected to undercut replacement levels, resulting in an aging of the fleet which will require catch-up in coming years. Longer term, we believe the administration's activities to leverage a revitalization of U.S. manufacturing could be meaningfully positive for trucking and specifically trailer demand."
See the May print edition of Trailer/Body Builders for additional coverage of the Wabash Q1 report.