Earnings Watch: Volvo Profit Falls While Daimler Gains

Earnings for two of the world's biggest truck makers varied greatly in the third quarter, according to figures released on Friday, and both had a dim view of upcoming sales in the North American market.

Mack and Volvo parent company Volvo AB of Sweden (OTC: VLVLY) reported net profit for the quarter ending August 31 fell by 15% from a year ago to 2.59 billion kronor or $290 million, according to MarketWatch.

Net sales fell 6% to 68.76 billion kronor, or $8.07 billion, compared to $8.64 billion compared to the third quarter a year earlier. Both revenue and profit fell short of analysts' expectations.

The Volvo Group's adjusted operating income declined to 4.8 billion kronor from 5.1 billion kronor a year earlier, or $568.8 million versus $599.9 million. However the company's adjusted operating margin improved slightly, hitting 7% compared to 6.9% in the third quarter of last year.

Deliveries in Volvo's truck business, which makes up about two-thirds of its total sales, were down 13% in all markets except Europe, where activity remained high, according to Martin Lundstedt, president and CEO.

“The downward correction in the North American market continued and there is still a need to take down dealer inventories," he said. "Production volumes have gradually been adjusted downwards to meet the lower demand and further steps will be taken. Expectations of unit growth in other truck markets are limited and therefore focus will be on the service business and continuous improvements."

Despite this he noted Volvo's truck business continued to improve its profitability, and the adjusted operating margin increased to 8.2% despite total net orders falling 7%.

Truck orders in Europe increased by 6%, but in North America order intake declined by 37% compared to the same quarter last year, and deliveries came down by 46% in total.

The decline in both orders and deliveries compared ...Read the rest of this story

Trucking insurance: It’s a new ballgame

With trucking insurance firms hiking premiums 10% to 30% in the wake of big claims, and with major companies such as Zurich Insurance Group AG and American International Group Inc. exiting the for-hire insurance market, it's suddenly much tougher – and much more expensive – for truckers to obtain adequate coverage.

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Class 8 orders follow trend: ACT Research

Baylor Trucking equips tractors with Bendix safety tech

Baylor Trucking President Cari Baylor said she is “more than happy with her company's decision to add 70 new Kenworth tractors – all equipped with Bendix driver assistance and side object detection safety technologies – to its fleet.” She's also not planning to stop there.

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OOIDA continues pushback against speed limiters

The Owner-Operator Independent Drivers Assn. (OOIDA) continues to push back against federal government attempts to mandate speed limiters on heavy-duty trucks, asking members of the House to oppose legislation the Senate tucked into a Veterans Affairs funding bill.

In a letter to the leadership of the House Transportation committee, OOIDA points out that the Dept. of Transportation has already published a rulemaking on speed limiters—so Congress needs to back off.

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Earnings Watch: Heartland, Werner, Forward Air Profits Fall by Double Digits

The third quarter earnings season continued on Thursday with the release of reports showing more trucking companies had lower earnings compared to a year ago. Much of the blame was placed on lower rates, less freight and excess trucking capacity.

Heartland Express Inc. (NASDAQ:HTLD) reported net income of $12.5 million, or 15 cents per share, down from $15.1 million, or 17 cents per share, a year earlier. Net income is 17% lower from a year earlier, and earnings per share missed a consensus estimate from analysts by 1 cent.

Revenue for the most recent period totaled $149.3 million, compared to $182.5 million in the third quarter of 2015.

Operating income dropped $4.9 million to $19.9 million, mainly due to the current operating environment challenges on freight volume and pricing, according to the Iowa-based company.

“The results achieved during the quarter and year-to-date have been hard fought,” said CEO Michael Gerdin. “We have continued to experience downward pressure on freight rates due to the softness in freight volumes resulting from the available capacity in the industry.”

However, he pointed out the company has continued to show year-over-year improvement in its operating ratio, excluding certain items, for both the third quarter and the year to date results.

“We were able to generate another quarter of solid cash flows from operations, which allowed us to increase our cash reserves and pay for capital expenditures while remaining debt free,” Gerdin said. “This allows us to operate profitably and maintain an efficient fleet of equipment, while keeping resources in reserve to capitalize on future investment opportunities that align with our operating strategy and our corporate values."

Meantime, Werner Enterprises Inc. (NASDAQ:WERN) reported third quarter net income fell 41% from a year ago to $18.9 million. Earnings per share moved lower to 26 cents from 44 cents, meeting a ...Read the rest of this story

How Carbon Express Did a 180 on Safety

Controller Sean McAllister and Director of Safety John Bowlby hold the National Tank Truck Council Outstanding Safety Performance Trophy at the entrance to Carbon Express headquarters.

When Steve Rush was an owner-operator, he would have laughed at the notion that one day he would be running a tanker fleet that would be recognized as the safest carrier by the National Tank Truck Council in the 15 million miles and under category. A fleet with a safety director who was recognized by both New Jersey and NTTC as safety director of the year. A company whose drivers had been honored three years running as state Truck Driver of the Year.

Rush, president of Wharton, N.J.-based Carbon Express, was a driver for the better part of 19 years. On one of his first jobs, he worked some 20 hours a day hauling U.S. mail, and “had more accidents than you could shake a stick at.” He still had his share of accidents as an owner-operator. And even when he started building his own fleet in 1983, he says, he didn't really pay attention to hours of service.

Then about 10 years ago, his then-safety director turned down an invitation to be chairman of safety for NTTC — and turned it down because “it would be a lie,” Rush recalls. That was a wakeup call for Rush, and he and Sean McAllister, today the company controller, set out to build a safety culture that would be worthy of the declined honor.

It wasn't easy. A company that previously had rubber-stamped driver logs now had to get drivers to adhere to hours of service and fill out logs accurately. Two years later, they transitioned to electronic logs.

One of the drivers chosen to be the first to use e-logs “was a great driver who really struggled,” Rush says. Rush ...Read the rest of this story