Semi-trailer builder Wabash National Corporation (NYSE: WNC) on Wednesday, July 31, reported all-time record second quarter revenue and its strongest operating margin in two years.
Wabash, which also makes liquid tankers, said net sales for the period ending June 30 rose 2 percent to $626 million from $613 million in the same quarter of 2018. Operating income was $47.5 million. The consolidated operating margin was 7.6 percent, a slight year-over-year improvement.
Second quarter net income was $30.9 million, or 56 cents per diluted share, compared with $31.9 million, or 54 cents per share a year ago.
The consensus of four analysts who cover Wabash National was 48 cents a share with revenue at $613 million. Wabash National raised its full-year earnings per share estimate to $1.65 as a midpoint from $1.60.
The company’s second-half outlook “remains unchanged as our stable backlogs give us visibility to strong revenue,” Brent Yeagy, Wabash president and chief executive officer, said in a statement.
In a conference call with analysts, Yeagy said Wabash’s approach to accepting new trailer and tanker orders helped avoid a surge of cancellations amid a weakening of the trucking sector.
“Some competitors took a higher level of speculative orders,” he said. “It’s the opposite of how we manage our backlog. It’s a positive that we experienced what we designed to happen.”
Wabash has $1.2 billion of trailer production that will take the rest of 2019 to build. The Lafayette, Indiana-based company expects to ship 14,000 to 15,000 trailers and tankers in the third quarter.
“Demand is strong and customer sentiment remains stable,” as discussions about 2020 orders begin with major customers, Yeagy said.
“They are not concerned about the ability to purchase,” he said, adding that Wabash anticipated orders would slow down after a record 2018. “We expect to move to more of a traditional period, which fits with how we see the market for 2020.”
Economic uncertainty from tariffs, slowing global economies, and the 2020 U.S. presidential election all could impact the trailer business.
“Things can turn on a dime, up or down,” Yeagy said.
