Trimble Inc. posted second-quarter earnings that beat analyst expectations as the technology company reported year-over-year (y/y) growth in its buildings/infrastructure and transportation units.
“In transportation, the market remains challenging with the soft freight market pressuring carriers to streamline their operations for cost savings to increase asset utilization and increase the productivity of their nondriver workforce,” Rob Painter, Trimble’s president and CEO, said during a call with analysts Thursday. “Against this backdrop, the overall transportation business both increased operating income margin for the sixth consecutive quarter and grew organic annual recurring revenue for the seventh consecutive quarter.”
The company’s transportation revenue increased 30% y/y in the second quarter to $194.7 million, while the buildings/infrastructure segment recorded a 7% y/y increase in revenue to $410 million.
Trimble Chief Financial Officer David Barnes said the transportation segment delivered 6% organic revenue growth driven by Trimble’s North American enterprise and maps businesses.
“Our mobility businesses in Europe and Brazil also grew revenue and annual recurring revenue at a double-digit rate in the quarter,” Barnes said.
Trimble’s (NASDAQ: TRMB) second-quarter earnings per share of 64 cents and revenue of $993.6 million beat Wall Street estimates of 58 cents per share and revenue of $979.1 million.
Trimble is a Westminster, Colorado-based provider of technology solutions for trucking companies, freight brokerages and 3PLs. In addition to transportation, the company also operates in industries such as buildings and infrastructure, geospatial hardware and software, and resources and utilities.
In December, Trimble acquired German logistics company Transporean for $1.98 billion, an acquisition that is already paying dividends, officials said. Transporean uses a cloud-based transportation management system to connect carriers, logistics service providers and shippers, primarily in Europe.
“Transporean’s performance was largely in line with our expectations for the quarter, notwithstanding a tough macroenvironment in the European transportation industry,” Barnes said.
Trimble’s second-quarter revenue was also boosted through an earlier than expected shipment of a large order of geospatial equipment to the U.S. Department of Transportation.
Trimble’s guidance for full-year 2023 mostly remained unchanged from the first quarter, with revenue expected between $3.84 billion and $3.92 billion. Organic revenue growth of between 2% and 5% is anticipated for the third and fourth quarters.
The company raised its full-year EPS outlook slightly to between $2.57 and $2.73.
“Revenue in buildings and infrastructure and transportation are expected to continue to grow organically in the third quarter, with rates comparable to or better than we experienced in the second quarter,” Barnes said.
North America remained Trimble’s largest market by revenue during the second quarter at $525.6 million, a 2% y/y increase compared to the same period last year.
Europe was the company’s second-largest revenue market in the quarter at $282.7 million, an 8% y/y increase compared to 2022, followed by Asia-Pacific at $110.6 million, a 7% y/y increase.
Painter said that truck spot market rates might have bottomed out in the second quarter, especially in Europe.
“What we think we saw in the quarter is that it looks like spot prices might have hit a bottom. Time will tell,” Painter said. “If that’s the case, then Trimble’s business model is there and ready to increase accordingly.”
TrimbleQ2/23Q2/22Y/Y % ChangeTotal revenue$993.6M$941.2M6%Transportation revenue$194.7M$150.1M30%Buildings/infrastructure revenue$410M$382.6M7%Geospatial revenue$192.9M$193.7M(0.4%)Resources/utilities revenue$196M$214.8M(9%)Adjusted EBITDA$251.5M$227.5M11%Adjusted operating income$231M$210.7M10%EPS$0.64$0.640%Trimble key performance indicators. $ in millions except EPS.
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