Shares of Hub Group (HBGL) have plunged today after logistics company failed to deliver solid earnings.
Bloomberg News The Associated Press has the details:
The company said it expects earnings in the quarter that ended on Sept. 30 to be between 48 cents and 51 cents per share, below the 54 cents expected by analysts polled by FactSet. Full results will be released on Oct. 17.
It also predicted earnings for the year between $1.85 and $1.95 per share, also below the $2.02 expected.
JPMorgan’s Michael Weinz and Thomas Wadewitz explain what caused the miss:
Our sense is that the truck brokerage and intermodal segments experienced unfavorable mix impacts that would be a headwind to gross yields. Intermodal was negatively impacted by soft demand for West Coast originated shipments, which we believe generates more operating margin dollars per shipment due to a longer length of haul compared to local east traffic. Truck brokerage mix was negatively impacted by a decline in demand for high-value services, which would imply lower truck brokerage margins.
Macquarie’s Kelly Dougherty and team say Hub no longer deserves “the benefit of the doubt.” They write:
…we no longer think HUBG can deliver on the growth or margin improvement we previously expected given both intermodal (IM) & truck brokerage weakness. A seeming inability to pass through IM rail cost increases, coupled with ongoing truck brokerage challenges, leave us with little to get excited about even as we look beyond 2013.
They downgrade Hub to Neutral from Outperform with a price target of $37.50, down from $41.
Shares of Hub have dropped 5.1% to $35.41, but the plunge doesn’t seem to be weighing on other logistic companies. CH Robinson Worldwide (CHRW), for instance, has gained 1.1% to $58.64, JB Hunt Transport Services (JBHT) has risen 1.1% to $71.61, Swift Transportation (SWFT) has advanced 0.9% to $19.56 and Ryder System (R) is up 3.1% to $59.23.
No comments:
Post a Comment