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Transportation company Schneider (NYSE:SNDR) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 6.3% year on year to $1.4 billion. Its non-GAAP profit of $0.16 per share was 13.4% above analysts’ consensus estimates.

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Schneider (SNDR) Q1 CY2025 Highlights:

• Revenue: $1.4 billion vs analyst estimates of $1.4 billion (6.3% year-on-year growth, in line)

• Adjusted EPS: $0.16 vs analyst estimates of $0.14 (13.4% beat)

• Adjusted EBITDA: $155.9 million vs analyst estimates of $145.8 million (11.1% margin, 7% beat)

• Management lowered its full-year Adjusted EPS guidance to $0.88 at the midpoint, a 16.7% decrease

• Operating Margin: 3%, in line with the same quarter last year

• Free Cash Flow was -$5.4 million compared to -$14.3 million in the same quarter last year

• Market Capitalization: $4.28 billion

StockStory’s Take

Schneider’s first quarter results reflected a combination of cost containment, disciplined pricing, and the first full-quarter contribution from the Cowan Systems acquisition. CEO Mark Rourke emphasized ongoing structural changes—such as capital optimization and asset efficiency—to restore margins and build resilience. He also highlighted growth in dedicated trucking and intermodal, citing new business wins and improved earnings across all major segments, with particular gains in dedicated and intermodal operations. Rourke acknowledged that the freight market remains highly competitive, with pricing improvements largely offset by weather-related disruptions and external pressures like tariffs.

Looking ahead, management adopted a cautious stance, lowering full-year adjusted EPS guidance due to growing uncertainty around trade policy and freight demand. CFO Darrell Campbell explained that the revised outlook accounts for moderating trends in both price and volume, as well as the impact of tariffs on equipment costs and customer behavior. Campbell noted, “Although lower, we expect continued year-on-year improvement in results throughout 2025,” but advised that ongoing macroeconomic volatility and cost inflation could temper the pace of recovery.

Key Insights from Management’s Remarks

Management’s remarks focused on structural business shifts, integration of acquisitions, and adapting to external trade pressures as key influences on the quarter’s performance and near-term outlook.

• Cowan Systems Acquisition Impact: The first full quarter with Cowan Systems in the portfolio immediately boosted dedicated trucking revenue and earnings, contributing to a 27% increase in dedicated trucks. Management expects $20–$30 million in synergies at maturity.

• Pricing Discipline and Freight Mix: By selectively managing its freight pool and maintaining price discipline, Schneider chose to forgo certain volumes, especially where pricing did not justify the commitment. This approach aimed to prioritize profitable business, though it led to lower network volumes.

• Intermodal Growth and Mexico: Intermodal earnings nearly doubled year-over-year, driven by increased shipping activity out of western Mexico. Management pointed to new business awards and noted that shipments compliant with USMCA are exempt from tariffs, providing some resilience against trade policy changes.

• Cost Containment Initiatives: The company is targeting $40 million in additional enterprise-wide cost reductions, including investments in AI-powered digital tools and automation of routine tasks. These initiatives are designed to improve margins and operational efficiency.

• Tariff and Trade Policy Uncertainty: Management flagged tariff-driven uncertainty as a growing risk, impacting equipment costs, repair parts availability, and customer freight behavior. The resulting volatility in volumes and pricing was explicitly incorporated into the company’s revised guidance.