Ravi Shankar

Ravi Shankar inquired about the drivers behind the 50% year-over-year increase in RXO's late-stage brokerage pipeline, including customer types, timing for new business implementation, and expected pricing dynamics. He also asked for an update on AI initiatives, particularly regarding mid-year productivity inflection and AI's impact on SMB outreach.

Answer

Drew Wilkerson, Chairman and CEO, RXO, explained that the pipeline growth reflects the team's focus post-Coyote integration, driven by strong relationships with existing enterprise customers and new, attractive names. He noted that bids are typically implemented in Q2, supporting optimism for truckload market outperformance by mid-year, with contractual pricing in the low to mid-single digits and spot rates expected to be significantly higher. Jared Weisfeld, Chief Strategy Officer, RXO, added that AI is driving significant progress across volume, margin, productivity, and service, with productivity up 19% year-over-year in 2025, and further incremental margin opportunities expected in the second half of the year.

Ravi Shankar asked about RXO's AI investments, how the company sells its technology platform to customers, and how it differentiates itself in the brokerage space. He also sought clarification on whether the Q4 guidance assumes the current demand-supply equation holds, and if a looser supply side would lead to better gross margins.

Answer

Drew Wilkerson, Chairman and CEO of RXO, emphasized that their AI investments are focused on results for employees, customers, and carriers, highlighting improvements in pricing algorithms, carrier communication, and last-mile installation validation. Jared Weisfeld, Chief Strategy Officer, explained that the Q4 guidance midpoint assumes current market tightness sustains, while the low end anticipates further tightening without spot opportunities. The high end, however, could be achieved if market tightening leads to routing guide pressures and accretive spot opportunities, or if buy rates ease.

Ravi Shankar asked Steve Angel if the previous long-term guidance template is still relevant for future earnings growth when macroeconomic conditions normalize, or if fundamental business changes suggest a different outlook.

Answer

Steve Angel, President and CEO, CSX Corporation, affirmed that nothing fundamentally changed in the business to prevent future long-term guidance or an algorithm. He reiterated his caution, preferring to demonstrate execution on current plans before providing a longer-term picture.

Ravi Shankar asked President and CEO Steve Angel if the previous long-term guidance template for earnings growth remains a valid framework once macroeconomic conditions normalize, or if fundamental changes in the business would necessitate a different approach.

Answer

President and CEO Steve Angel affirmed that he does not believe anything has fundamentally changed in the business to prevent CSX from eventually providing a longer-term guidance or algorithm. He reiterated that his current caution stems from wanting to ensure the company can execute its immediate plans before committing to a longer-term picture.

Ravi Shankar questioned if United's full-year 2026 guidance is more conservative than usual, asking about the number of 'acts of God' factored into the forecast.

Answer

Andrew Nocella, Executive Vice President and Chief Commercial Officer, explained the careful forecasting process, noting that Q1 was more refined. He highlighted a strong start to the year, particularly in international and business demand. Scott Kirby, CEO, added that United's 2025 performance, delivering within guidance despite significant challenges, demonstrates their commitment to financial targets. He suggested that if current booking trends continue, the forecast will prove more conservative. Shankar also asked about the timing and forum for United's next set of long-term targets, as the United Next plan nears its original timeline. Scott Kirby stated that current long-term commitments (double-digit margins, 75% free cash flow conversion, investment grade) are sufficient. Andrew Nocella added that the commercial team has been planning for years and looks forward to sharing future commercial plans for the latter part of the decade.

Ravi Shankar from Morgan Stanley inquired about the timing for United's next set of long-term targets, given the nearing completion of the United Next plan, and any incremental loyalty disclosure.

Answer

EVP and Chief Commercial Officer Andrew Nocella reiterated current long-term benchmarks: double-digit margins, 75% free cash flow conversion, and investment-grade rating. CEO Scott Kirby added that the commercial team has been planning for years and looks forward to sharing future plans for the latter part of the decade.

Ravi Shankar sought to confirm the nature of Aurora Innovation's relationship with International, specifically whether it's a stock truck purchase or an OEM partnership, and inquired about the timeline for commercial launch. He also asked about the visibility into the bill of materials (BOM) costs for Gen 2 and Gen 3 hardware and the timing for pricing discussions with OEM partners.

Answer

CFO David Maday clarified that Aurora is ordering stock trucks from International for upfitting, not a co-development partnership. Co-Founder and CEO Chris Urmson added that the International LT Series trucks are expected to be driverless in Q2 2026. David Maday stated that Aurora has good insight into the BOM costs for the Aurora Driver today, which are factored into the driver-as-a-service subscription model rather than an upfront truck purchase.

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 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 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.