School bus manufacturer Blue Bird Corp (NASDAQ:BLBD) saw its net loss shrink in its fiscal first quarter and beat Wall Street’s profit and revenue estimates after adopting higher pricing to offset a jump in commodity costs.
In the three months ended December 29, the company posted a net loss of $1.2 million, which represented an improvement of $6.6 million compared with the year-ago period. On an adjusted basis, its earnings came in at $0.05 per share on revenue of $154.9 million.
In response to the results, Matt Koranda, an analyst with Roth Capital Partners, reiterated his Buy rating and raised his price target on the stock to $23 from $22.
"We see encouraging signs that BLBD is on track to fulfill FY’19 guidance," Koranda wrote in a note to investors.
The results handily beat the estimates of Wall Street analysts who had predicted Blue Bird would earn a loss of $0.03 per share on sales of $154.15 million.
Blue Bird shares held steady in morning trade on Thursday, rising by just 0.77% to hit $20.20.
In a statement, CEO Phil Horlock suggested that the company’s move to put in place higher prices to offset increasing commodities costs rescued the quarter.
“Maintaining first-quarter profitability at about last year’s level, despite significantly higher steel-led commodity prices and lower volume, was a key objective, and we delivered,” he said. “The pricing actions we took to offset rapidly-increasing commodity costs late in fiscal year 2018 have taken hold as expected, resulting in a 3% increase in net revenue per school bus in the first quarter, compared with last year.”
Looking ahead, the company expects full-year revenue of $990 million to $1.025 billion.
Headquartered in Macon, Georgia, Blue Bird says it has more than 180,000 buses in operation.