Investing.com -- Shares of Kuehne & Nagel (SWX:SIX:KNIN) climbed 1% as the global transport and logistics company reported an earnings beat, driven by strong performance in its Sea and Air Logistics divisions.
The company’s Sea Logistics saw an 8% beat with volumes up by 3% year-on-year (YoY), despite lapping the reduction of some lower-yielding volumes. The acquisition of drayage company IMC contributed to a significant 11% rise in gross profit per TEU.
Air Logistics also outperformed consensus with a 4% beat, as volumes continued their growth trajectory at 4.7% for the first quarter, in line with the last quarter’s development. The division’s unit gross profits increased by 7% YoY, contributing to the overall positive results.
However, the Road division faced challenges with declining year-on-year earnings, attributed to yield pressure from low demand in the network. Contract Logistics turnover grew by 3.0% YoY, slightly below consensus, with stable EBIT margins.
Kuehne+Nagel’s guidance for the year remains unchanged, expecting EBIT of CHF 1.5bn-1.75bn. The company’s outlook is based on positive economic growth and fx rates as of the end of February, though there is noted uncertainty due to the Swiss Franc’s recent strength against the US Dollar.
Bernstein analysts commented on the results, stating, "Our thoughts: much improved, but investors will need more to gain renewed confidence and fx risk to guidance. We have been waiting for the quarter when Kuehne+Nagel catches back up with its large peers. Q1 saw good volume development in both Sea Logistics and Air Logistics, with EBIT in both nicely ahead of consensus.
One quarter is not enough to declare job done on the turnaround, but it is certainly a start. Still worth bearing in mind — guidance has been preserved, but depends on fx rates being as they were at the end of February; the CHF has strengthened meaningfully vs the USD since then and presents risk here."
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