Yahoo Finance Hub Group Inc (HUBG) Q1 2024 Earnings Call Transcript Highlights: Navigating Market Challenges ...
Reported Revenue: $1 billion, down 13% year-over-year from $1.2 billion.
ICS Revenue: $552 million, a decrease of 22% from the previous year.
Logistics Revenue: Increased to $480 million, up 2.4% year-over-year.
Operating Income Margin: 3.7% for the quarter, a slight increase from the previous quarter.
ICS Operating Margin: 2.4%, slightly down from 2.6% in the previous quarter.
Logistics Operating Margin: 5%, up 60 basis points from the previous quarter.
Net Income: Earnings of $0.44 per diluted share.
Free Cash Flow: $63 million for the first quarter.
Dividends: Issued first quarterly dividend of $0.125 per share.
Stock Repurchases: Purchased $26 million of stock at an average price of $44 per share.
Full Year Revenue Guidance: Expected to be between $4.3 billion and $4.7 billion.
Full Year EPS Guidance: Anticipated to be in the range of $1.80 to $2.25 per share.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you walk us through the monthly year-over-year volume trends, and any color on April volumes? Also, what was the intermodal price for Q1? A: Phillip Yeager, President, CEO, and Vice Chairman, explained that January was down 16%, February down 6%, March down 8%, and April month-to-date up 16%. He noted that pricing has been more competitive, leading to a revised guidance assuming mid-single digit price for the full year but a higher volume guide adjusted up to high single digits for the full year.
Q: How much incremental price did you have to give up to achieve the plus 11% on volume? A: Phillip Yeager clarified that it wasn't materially different from their initial guidance, emphasizing a focus on managing costs and network velocity rather than incremental price changes.
Q: With 40% of the bid season in the first quarter and disappointing results industry-wide, does this lock in 40% of the portfolio at these depressed rates even if there's a spot market upturn later in the year? A: Phillip Yeager mentioned that typical contracts don't change the timeframe for commitment, but overflow and additional freight can provide opportunities for higher returns when the market turns.
Q: Can you discuss the progression of margins in intermodal throughout the year, especially with pricing down mid-single digits? A: Kevin Beth, CFO, indicated that while price significantly impacts margins more than volume, they anticipate stable margins, possibly fluctuating slightly throughout the year due to ongoing cost management and changes in rail contracts.
Q: What is the growth expectation for the Logistics segment excluding the Final Mile acquisition, and what is the normalized margin for this segment? A: Brian Alexander, COO, discussed continued organic growth through new customer acquisitions and cross-selling. Kevin Beth added that current brokerage margins are low due to market conditions, but there is potential for improvement as the market recovers.
Q: How is the Final Mile acquisition performing, and what is the progress on cross-selling initiatives? A: Brian Alexander noted that the integration is ahead of schedule with synergies being realized faster than expected, particularly through cross-selling where they have already seen new customer wins.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
