Blue Bird (BLBD 4.46%) is making more money selling school buses than expected, and investors are taking notice. Shares of the transportation company surged 26% Thursday after a strong earnings report.
Blue Bird gets an A+
Blue Bird is a nearly 100-year-old maker of school buses with more than 20,000 vehicles currently on the road.
The company earned $0.89 per share in its fiscal second quarter ending March 30 on revenue of $345.9 million, easily topping Wall Street's forecast for $0.48 per share on sales of $300 million. Revenue was up 15% and net income was up 37% year over year to $26 million despite the company selling 50 fewer units in the quarter.
"The Blue Bird team continued to execute ahead of plan, improving operations and throughput, driving new order growth, and expanding our leadership position in alternative-powered buses," CEO Phil Horlock said in a statement.
Post-earnings the company raised its full-year revenue guidance to $1.275 billion to $1.315 billion, from $1.15 billion to $1.25 billion. Wall Street had expected $1.25 billion in sales.
Is Blue Bird stock a buy after its strong report?
Blue Bird is in the middle of a multiyear plan to streamline operations and grow more efficient, and the results suggest things are going as hoped. The company finished the quarter with a backlog of more than 5,900 units. By comparison, it delivered 2,254 units in the recently completed quarter.
The company is also making strides staying ahead of potential disruption from alternative-powered school buses. Blue Bird has about 500 electric-powered school buses in its backlog, fueled by an Environmental Protection Agency program that awarded nearly $1 billion in funding in 2023 for green buses.
It is unlikely schools will stop using buses any time soon. The question has been whether Blue Bird can profitably take advantage of that demand. The latest results suggest to investors that Blue Bird is on the right path.
