Scott Group

Feight pointed to freight tonnage levels, GDP growth and reshoring as the demand underpinning.

Feight spoke to product and footprint advantages but gave no quantified long-term margin target.

Management attributed demand to improving customer financials and fleet age normalization, with both replacement and growth elements

Management pushed back that orders aren't the cleanest metric, pointing to 31.8% Q1 build share as better indicator of market position

Feight expects used truck values to rise further due to EPA 27 new truck price increases. Some temporary softness from CDL enforcement impact on used buyers.

Feight explained fewer non-compliant drivers improves rates for established carriers, boosting their profitability and truck purchasing ability.

Feight confirmed surcharges will be removed as stability returns. Normal pricing discussions resume, with cost favorability benefiting both parties.

Feight confirmed margin improvement from December through Q1 2026 as tariff costs decline with 232 implementation.

Feight confirmed Q2 tariff impact significantly less than $75M due to timing of implementation. Q4 depends heavily on Section 232 outcome.

NA roughly 50% full for Q3, Europe mostly full. Big Beautiful Bill and regulatory clarity could drive closer-in order activity.

Feight confirmed Q2 margin pressure is primarily a timing issue of tariff costs hitting before pricing can fully catch up.

Feight confirmed US and Europe flat sequentially, with Mexico accounting for most of the delivery decline due to trade uncertainty.

Feight explained parts growth is a tale of two halves like the overall business. Expects strengthening in second half tied to freight activity.

Feight confirmed normal backlog levels for this point in the cycle. No significant pre-buy order intake yet for 2H25/2026.

Management addressed both headcount needs and gave a quantified Q3 margin seasonality outlook.

Mark expressed increased confidence in merger approval, citing stronger data and customer engagement. New application will strengthen the case for a single-line transcontinental railroad.

Ed attributed flat RPU ex fuel to mix from growth in lower-rated chemicals commodities like frac sand and NGLs, while core pricing remains strong and near-record levels.

CEO noted STB turn-back is typical for initial applications and they've been given a clear path to completeness. On pricing, 'fight for business' is a rallying cry not a pricing change, core pricing was very good in 2025 with strong merchandise yields. Seeking quality revenue, not discounting.

CMO confirmed merger-related volume losses concentrated in Southeast domestic non-premium intermodal, starting late Q3. Expects it to persist over next couple of bid cycles but confident NSC's superior route structure will win freight back. CEO emphasized impact was independent of merger itself.

CFO pointed to 5-year seasonal average of ~1.5% Q3-to-Q4 expense increase. Headcount expected to step up slightly from below 19,500 toward Q4 2024 exit rate. Depreciation and purchase services to increase from capital work completion and IT managed services transition.

CEO acknowledged NSC is not fully volume variable and declined to address specific 5% decline scenario, but emphasized extensive productivity runway, scenario planning, and ability to trim if pressures materialize.

CMO confirmed both favorable mix from chemical share gains and above-plan same-store pricing contributing to merchandise yield strength.

CMO confirmed growth across most markets with coal the main drag. Labor productivity has continued runway across all operating ranks beyond T&E, with 18.5% overtime reduction in Q4.

Russ confirmed the 24-month tax-efficient monetization window and that Freight is excluded from guidance, but offered no further timing detail.

Carere attributed growth to multi-year commercial retrench on B2B alongside world-class B2C proposition. 11 consecutive quarters of European share gains. Expects trends to continue in Q4 but will lap healthcare onboarding and international priority momentum. FY27 targeting 4% disciplined revenue growth.

Dietrich broke down H2 $600M: ~$160M LTL softness, ~$175M MD-11 grounding, ~$265M variable compensation (majority in Q3). Q3 EPS sequentially lower than Q2 but Q4 expected to be strongest quarter of year.

Dietrich explained $1B trade headwind across lost revenue opportunity, direct trade expenses ($300M), and base expense increases. Q2 expected to improve sequentially vs Q1 but not guiding to YoY direction.

Dietrich declined to split DRIVE vs Network 2.0 but committed to the $1B total. On earnings growth, framed it as demand-dependent: $3.40 at flat revenue, $3.70 at 1%, $4 at 2%. Subramaniam emphasized operating leverage from $4B cost reduction.

Dietrich declined full FY26 guidance but shared helpful framing: ~$400M DRIVE annualization benefit, continued inflationary pressures, USPS headwind through Q2, and Network 2.0 savings ramping more in FY27. Confirmed LTL separation on track.

CFO explained 18 months is consistent for this magnitude, confirmed USPS cost removal on track with 60% daytime flight hour reduction, and noted Q4 headwind will lessen.

Did not confirm the August and September seasonality assumption or give a timeline, instead framing 300 to 400 basis points of annual operating ratio improvement in a first big growth year.

Adam confirmed truckload-to-LTL reversion is happening, cited specific large accounts that consolidated loads during weak TL market and are now reverting back to LTL.

Weight increase from both contract and mom-and-pop customers. TL-to-LTL spillover beginning to normalize. Revenue per hundredweight may face 50bp headwind from weight mix but revenue per shipment improves. January yield ex-fuel ~4%, normal seasonality would be 4-4.5%.

General discipline in industry. Yield ex-fuel up ~5% in October. EPS down less than half versus publicly traded peers. Cost control and yield discipline protecting OR better than competition.

Adam firmly defended strategy. Direct costs at 52-53% same as sub-70 OR in 2022. Overhead at 22% vs 17% is the gap. Industry down ~15% from 2022; ODFL performance aligned with industry. No fundamental strategy change needed.

Q2 revenue range $1.4B (flat per day) to $1.5B (normal seasonality). Yield management consistent through downturn. Targets sub-70 OR long-term with overhead at 22% vs 17% in 2022.

Adam framed Q1 revenue at $1.34B-$1.38B depending on seasonality performance. January yield up 4.5% partly driven by lower weight per shipment mix.

Nocella attributed the high booked-yield figure to a low leisure base; Leskinen tied 80 retirements to CASM tailwind.

Scott gave extensive answer: marketing teams better communicators than RM teams, internal pressure suppresses fare increases. Airfares in real terms down 27% vs pre-pandemic. Estimates keeping 20% of increase if normalized quickly, moving toward 80% the longer crisis lasts. Double-digit margins targeted for 2027.

Mike acknowledged the math showing midpoint implies less than full point of margin. Guidance deliberately conservative after 2025's multiple asteroids. Explicitly signaled upside if trends continue.

Mike declined specifics on loyalty EBITDA base or 2026 guidance but confirmed confidence in margin expansion and earnings growth in 2026. Kristina noted Investor Day will provide segment breakdown.

Scott emphasized strategic importance of JFK presence via JetBlue partnership, built-in frequent flyer base on both sides of Hudson, and return to JFK in 2027.

Andrew confirmed the 6-point swing is broad-based with Newark contributing more than the system average. Q4 RASM improvement expected primarily domestic.

Scott Kirby argued math of high airport costs makes ULCC profitability at major hubs structurally impossible.

Management gave an extensive, direct response expressing stronger conviction in the merger, citing customer benefits, employee job guarantees, and enhanced competition through seamless service.

Jim expressed unwavering confidence, arguing competitors only complain because they fear enhanced competition. He dismissed concerns about the walk-away red line disclosure, noting the STB wants it but he doesn't see its relevance to merger merits.

Jim dismissed rail opposition as competitive anxiety, using the Starbucks analogy. Jennifer confirmed mix should be positive in Q4 but warned of tougher coal pricing comps ahead and continued weak truck market pressuring intermodal pricing.

Jennifer confirmed mix should improve in H2 as international intermodal declines, while Kenny attributed coal strength to natural gas pricing and LCRA wins.

Jennifer confirmed mix and pricing together created a 250bp freight revenue drag, while Jim argued he'd prefer higher revenue with slightly worse OR over lower revenue with better OR.

Jim Vena directly confirmed the high single to low double-digit EPS growth target, emphasizing the team's commitment to delivering on Investor Day goals.

Jennifer confirmed pricing was already accretive in Q4 2024, ahead of plan, and expects it to continue through 2025.