Dive Brief:
- Wabash trailer orders slowed in Q2, with net sales in its Transportation Solutions segment falling 21% year over year to under $499 million, the OEM reported last month.
- The broader industry experienced a 14% decline in Q2 YoY and 24% drop for the first half of of the year, ACT Research noted.
- Customers have “revised their capital expenditure plans downward for the balance of this year,” Wabash President and CEO Brent Yeagy said on an earnings call, noting that despite industrial indicators turning positive and more balanced inventory levels, a freight market transition will take time.
Dive Insight:
Wabash’s CEO shared optimism over the future of the industry, suggesting the TL market seems to be returning to normal seasonality.
As far as its full-year revenue outlook went, the company revised its projection down to a range of about $2 billion to $2.2 billion, a drop from an earlier estimate of $2.2 billion to $2.4 billion.
Despite the financial outlook changes, Yeagy reassured investors that “Wabash is on track to achieve the best financial performance on record during correction in our industry.”
The company is staying prudent on pricing but expects sequential decreases in pricing from Q2 to Q3 and Q4, CFO Mike Pettit said. “It's not going to come down a whole lot, but it will be down,” he said.
FTR noted the U.S. trailer market saw some notable drops in orders during recent months amid stagnant rates. Senior Analyst of Commercial Vehicles Dan Moyer said in a report that further pressures involve “high dealer inventory levels, elevated pricing on inventoried units, and falling used trailer values.”
