Blue Bird Corp. releases its fiscal second-quarter earnings after market close on Wednesday. Investors focus on whether the school bus manufacturer can maintain record profitability despite year-over-year revenue challenges.
Earnings Expectations
Analysts forecast earnings per share of $0.87 on revenue of $336.6 million. This reflects a sequential drop from last quarter’s $1.00 EPS, though revenue edges up slightly from the prior $333.1 million. EPS estimates have stayed stable over the past week but declined 1.33% in the last 60 days.
The $2 billion school bus maker trades at $63.39, close to its 52-week high of $66.13. Analysts rate it a Strong Buy with an average price target of $69.29, suggesting about 10% upside potential.
Revenue faces a projected 6.2% year-over-year decline, reversing recent growth. Questions arise on whether operational gains can counter weaker top-line results.
First-Quarter Performance
Blue Bird posted strong first-quarter results in February, with $1.00 EPS beating estimates by 23.5% and $333.1 million in revenue surpassing forecasts by 3.6%.
Key Investor Focus Areas
Margin Sustainability
Margins lead the watchlist. The first quarter achieved the highest-ever gross margin, even with softness in electric vehicle units. Profitability gains arise from operational excellence, not just product mix. Investors examine if pricing discipline, supply chain efficiency, and automation sustain margins amid moderating revenue.
Micro Bird Integration
April’s integration of Micro Bird, after a $200 million acquisition of its partner’s stake, expands into shuttle buses and commercial chassis. Management likely discusses early progress and market growth beyond school buses.
Electric School Bus Demand
Electric school buses made up 7.5% of new sales in 2024, though recent quarters show EV unit weakness. As the leader in low- and zero-emission buses with over 25,000 propane, natural gas, and electric units sold, Blue Bird’s update on EPA Clean School Bus funding pipelines offers demand insights.
Strong Fundamentals
The company shows solid momentum: trailing 12-month revenue growth of 11.6%, EPS growth of 23.4%, and EBITDA growth of 25.9%. At 15.4 times trailing earnings and 14.0 times forward earnings, valuation suits double-digit growth. Results reveal if operational leverage expands margins in a softer revenue setting or if top-line pressures impact profitability.
