Trimble Inc. on Wednesday reported that its first-quarter transportation revenue decreased just 2% year over year (y/y) to $154.9 million.
“In transportation, the market backdrop is very dynamic with a softening freight market that’s pressuring carriers to find new frontiers of efficiency, which technology can help address,” Rob Painter, Trimble’s president and CEO, said on a call with analysts Wednesday. “By the numbers, we met our expectations in the quarter, and we have delivered five sequential quarterly increases in operating income as a percent of revenue.”
Trimble’s transportation unit’s operating income in the first quarter of 2023 was $23.4 million compared to $9.2 million in the same quarter last year.
Trimble (NASDAQ: TRMB) reported total revenue of $915.4 million in the first quarter, an 8% y/y decline, and earnings per share of 72 cents, a 1% decrease compared to the same quarter last year.
The company’s first-quarter EPS of 72 cents was 5 cents better than the analyst estimate of 67 cents but missed on revenue estimates of about $929 million.
Trimble is a Westminster, Colorado-based provider of technology solutions for trucking companies, freight brokerages and 3PLs. In addition to transportation, the company also operates in industries such as buildings and infrastructure, geospatial hardware and software, and resources and utilities.
Trimble updated its guidance outlook for full-year 2023 and expects to report revenue between $3.8 billion and $3.9 billion and EPS between $2.52 and $2.72.
North America remained Trimble’s largest market by revenue during the first quarter at $482 million, a 3% y/y decline compared to the same period last year.
Europe was the company’s second-largest revenue market in the quarter at $268 million, a 16% y/y decline compared to 2022, followed by Asia-Pacific at $103 million, an 11% y/y decline.
In December, Trimble acquired Transporeon, a Germany-based logistics company that uses a cloud-based transportation management system to connect carriers, logistics service providers and shippers, primarily in Europe. The all-cash deal was valued at $1.98 billion.
Trimble lowered its full-year revenue expectations for the Transporeon segment, citing “disappointing” macroenvironment signals from the market.
“It’s disappointing, when we break down the underlying factors, we see a couple of things,” Painter said. “The first is that the overall level of transactions has gone down in Europe, and when we look at the end markets, like consumer packaged goods, retail, chemicals, those are three relatively big markets for the [Transporeon] business.”
Painter said the transaction volume slowed more than they anticipated in the CPG market, but he expects that market to rebound because “people are still going to eat.”
“Spot prices have come down and the business differentially monetizes when spot rates are higher, so spot rates will come down if transaction volume comes down,” Painter said. “The third piece, which connects to actually the back to spot prices, is that truck capacity went up in Europe. If you follow new unit trucks hitting the market in Europe, that capacity increased at the same time as the transaction slowed further, pressuring spot prices.”
Painter said the company expects the Transporeon business unit to rebound by the end of 2023.
“We expect to see 30% bookings growth in the business, the underlying fundamentals of the quality of the business are there, and we believe it would be poised to bounce back when the markets improve,” Painter said.
| Trimble | Q1/23 | Q1/22 | Y/Y % Change |
| Total revenue | $915.4M | $993.7M | (8%) |
| Transportation revenue | $154.9M | $158.7M | (2%) |
| Buildings/infrastructure revenue | $399.5M | $397.6M | (0.5%) |
| Geospatial revenue | $152.4M | $207.5M | (27%) |
| Resources/utilities revenue | $208.6M | $229.9M | (9%) |
| Adjusted EBITDA | $248.8M | $253.3M | (2%) |
| Adjusted operating income | $226.1M | $233.1M | (3%) |
| EPS | $0.72 | $0.73 | (1%) |
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yes and it keeps falling. was that $1.98 billion well spent? it doesn’t even work in the US. We have nothing new or affordable here for trucking or brokerage and so customers are steadily peeling away to go to lower priced more modern products. We don’t even have options for them so they leave.
at least the Browns and the Lions get first pick in the draft when they need help. we got nothin. lets see what Q2 brings I guess.