Ravi Shankar

Ravi Shankar asked about Delta's 1Q network planning, considering market noise and last year's close-in weakness in corporate travel, and whether last year is being treated as a one-off or if a more cautious approach is being taken. He also inquired if European strength in transatlantic travel is expected to continue into 1Q 2026, similar to 1Q 2025, despite a less favorable U.S. dollar.

Answer

President Glen Hauenstein stated that Delta expects to enter 1Q with a strong backdrop, similar to the Q4 exit, with robust demand, hoping the 'spring swoon' does not recur. He confirmed that European strength in transatlantic travel is expected to continue into 1Q 2026.

Ravi Shankar asked about Delta's 1Q network planning, considering market noise and last year's close-in weakness in corporate travel, questioning if last year is treated as a one-off or if a more cautious approach is being taken. He also inquired if European strength is expected to continue into 1Q 2026, similar to this year, despite a less favorable dollar.

Answer

President Glen Hauenstein stated that Delta is heading into 1Q with a very strong backdrop, similar to exiting Q4, with robust demand. He confirmed that European strength is expected to continue into 1Q 2026, similar to what was seen coming into this year.

Ravi Shankar of Morgan Stanley sought clarity on the primary factors driving GXO's repeated guidance increases, asking whether it was due to macro improvements or company-specific execution. He also requested more details on the aerospace and defense (A&D) business.

Answer

CFO Baris Oran clarified that the improved profitability guidance is primarily driven by internal actions, including site-level efficiencies, maturation of new startups, and better space utilization. CSO Kristine Kubacki added that the A&D market is a massive opportunity, with GXO's related pipeline doubling to $500 million in 18 months, a key focus for the Wincanton integration.

Ravi Shankar from Morgan Stanley inquired about the factors driving the 2027 EPS target of $2.50, specifically its reliance on industry macro trends versus company-specific initiatives. He also asked for insights into Amazon's expectations for the upcoming peak season.

Answer

CEO Jude Bricker stated the long-term forecast assumes a 3% inflationary tailwind and normalized utilization, without aggressive assumptions. Regarding Amazon, he noted that aircraft induction delays have pushed back the ramp-up of asset utilization and availability, taking longer to reach full velocity.

Ravi Shankar of Morgan Stanley inquired about the competitive environment across Schneider's segments and asked whether truckload capacity exits could be outpacing other areas. He also asked about the company's agility in shifting between spot and contract freight.

Answer

EVP Jim Filter noted that TL capacity is exiting due to smaller competitors leaving and regulatory enforcement on English language proficiency. CEO Mark Rourke added that dedicated faces competition from alternative solutions, while intermodal's main competitor is over-the-road truck. He described the network segment as highly competitive. Regarding agility, Rourke asserted that Schneider is 'very capable' of pivoting capacity quickly between spot and contract markets using its proprietary tools and technology.

Ravi Shankar of Morgan Stanley asked for more color on the impressive 40% year-over-year growth in MMX intermodal service volumes, questioning the drivers and if there was any tariff-related pull-forward.

Answer

EVP & CMO John Brooks attributed the growth to a 'really strong sales effort' for a truck-like, seamless service that is the fastest in the industry. He confirmed the growth is sustainable, driven by strong partnerships like Schneider, a sizable new automotive parts contract that is ramping up, and forthcoming reefer business from the new Americold facility. He expects the growth trajectory to continue, putting pressure on operations to start a second train.

Ravi Shankar from Morgan Stanley asked for clarification on which aspects of the Amazon volume 'glide down' were not proceeding as planned and whether lower-than-expected employee attrition could jeopardize the $3.5 billion cost savings target.

Answer

CEO Carol Tomé stated that the only deviation from the plan was a lower employee attrition rate than modeled. She explained this is a timing issue, as attrition rises the longer a facility is closed, and most Q2 closures occurred late in the quarter. She expressed confidence that the attrition rate will normalize over time and that the full $3.5 billion cost savings target remains on track for the year. CFO Brian Dykes added that the voluntary separation program for drivers is a key lever to manage this.

Ravi Shankar inquired about the customer profile being attracted to the new international routes. He also asked for an update on the recovery of the Hawaii tourism market relative to the company's initial conservative assumptions.

Answer

CEO Ben Minicucci expressed confidence that the strength of the Seattle hub, domestic network, and loyalty program will attract both leisure and business travelers to the new international flights. CFO Shane Tackett and CCO Andrew Harrison clarified that while the core assumption of a slow Asia-to-Hawaii recovery holds, the West Coast-to-Hawaii and inter-island markets are performing well.

Ravi Shankar of Morgan Stanley inquired about Ryder's confidence in deploying its balance sheet 'dry powder' immediately versus waiting for a market upcycle, and asked about the outlook for used truck values in the second half of the year.

Answer

Chairman & CEO Robert Sanchez stated that the company feels confident about its capital position, with share repurchase programs in place and an active search for acquisition opportunities. He noted that while the increase may be muted, he expects the upward trend in used tractor pricing to continue through the second half, particularly in the fourth quarter.