Wabash reported a 19% decline in revenue to $363 million and a 27% drop in net income to $20.2 million, or $0.32 per share. But investors were looking beyond the quarter, to full-year guidance of earnings of $1.44-$1.56 per share on shipments of 52,00-56,000 new trailers, 1,000 more than previous guidance.
Investors had expected a decrease in shipments in 2017 after a record 2016 that saw 60,000 new trailers shipped. And in that scenario, even seemingly bad earnings can cause a pop in a stock like Wabash National.
Despite a down year, Wabash National's shares are trading at 14 times the top end of earnings estimates, even after last month's pop. Also, the trailer business shouldn't be in for as much disruption as trucking in general, with new self-driving technologies on the horizon. In fact, we could see shipping via truck become more economical with self-driving trucks, which would be good news for Wabash National's financial performance in the long run.