Trimble Inc. (NASDAQ: TRMB) reported on Wednesday fourth-quarter transportation revenue of $159.7 million, down 22.5% compared to the fourth quarter of 2019.
Overall, the company produced $829.7 million in revenue during the fourth quarter of 2020, with earnings per share of 71 cents. Earnings per share, adjusted for one-time gains and costs, came to 61 cents per share.
The results exceeded Wall Street expectations, who expected earnings of 52 cents per share and revenue of $787.6 million for the fourth quarter.
In the same quarter last year, Trimble announced earnings per share of 53 cents on revenue of $824.7 million.
“Our fourth-quarter financial performance in transportation reflects many of the same factors we have discussed in prior quarters,” David Barnes, Trimble’s chief financial officer, said during an earnings call Wednesday. “Customer attrition in our mobility business since late 2019 accounts for the majority of the adverse development in segment annual recurring revenue growth and margins.”
Barnes said the transportation segment has been improving “as our product performance has improved and customer churn has declined sequentially in each of the last three quarters.”
“Note that the ongoing subscription transition in our transportation enterprise software business to press revenue trends in the quarter — and the Kuebix acquisition — had an unexpected dilutive impact on segment margins,” Barnes said. “While we have more work ahead of us to improve the performance of this business, we continue to believe in the power of our connected transportation strategy.”
In January 2020, Trimble acquired privately held Kuebix, a TMS provider and creator of one of North America’s largest connected shipping communities. The acquisition enabled Trimble to bring together its network of private fleet and commercial carrier customers with Kuebix’s community of more than 21,000 shipping companies, according to Trimble officials.
Sunnyvale, California-based Trimble is a provider of technology solutions for trucking companies, freight brokerages and third-party logistics providers.
Trimble’s fourth-quarter net income was down 35% compared to the same period in 2019, from $279.3 million to $180.3 million.
President and CEO Rob Painter said the company did better than it had anticipated for the fourth quarter.
“We beat our own expectations in the buildings and infrastructure segment, geospatial and resources and utilities [segments],” Painter said. “We hit our expectations in transportation. Broadly speaking, we have seen signs of an emerging construction-led recovery. We are experiencing favorable market conditions in agriculture.”
North America represented Trimble’s largest market share in the fourth quarter, accounting for $415 million in revenue. It represented an 8% decline in North American revenue compared to the same period in 2019.
Europe accounted for $250 million in revenue during the fourth quarter, up 8% compared to last year. The Asia-Pacific market accounted for $113 million in revenue, up 13%, with the rest of the world producing revenue of $52 million.
Trimble’s buildings and infrastructure segment was its top producer during the fourth quarter, with revenue of $321.4 million, a 2% increase compared to last year.
Trimble said it expects full-year 2021 earnings in the range of $2.25 to $2.45 per share, with revenue around $3.3 billion to $3.4 billion.
Barnes said the company based its 2021 financial outlook on several key assumptions.
“We assume that public health initiatives are successful in enabling a broad reopening of constrained sectors of the economy by midyear 2021,” Barnes said. “Our plan is rooted in the assumption that the economy grows through the year with 2021 GDP at least recovering to 2019 levels. Our most important key performance indicator will continue to be annual recurring revenue. We expect organic annual revenue growth to end 2021 in the high-single-digit range, with sequential improvement as the quarters progress.”
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