Blue Bird Corp. releases its fiscal second-quarter earnings on Wednesday after market close. Investors focus on the school bus manufacturer’s ability to 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 in EPS from $1.00 last quarter, while revenue edges up slightly from $333.1 million. EPS estimates have stayed stable over the past week but dipped 1.33% in the last 60 days.

The $2 billion school bus producer trades at $63.39, close to its 52-week high of $66.13. Analysts assign a Strong Buy rating with an average price target of $69.29, suggesting about 10% potential upside.

Revenue faces a projected 6.2% year-over-year decline, shifting from prior growth patterns. Operational enhancements must counter this softer top-line performance.

First-Quarter Performance

Blue Bird posted a robust first quarter in February, with EPS of $1.00 surpassing estimates by 23.5% and revenue of $333.1 million exceeding forecasts by 3.6%.

Key Areas Under Scrutiny

Margin Sustainability

Margins lead investor concerns. The first quarter achieved the highest gross margin ever, even with weakness in electric vehicle units. Profitability gains arise from operational excellence, not just product mix. Pricing discipline, supply chain improvements, and automation will determine if margins hold as revenue softens.

Micro Bird Integration

In April, Blue Bird completed its $200 million acquisition of its partner’s stake in the Micro Bird joint venture. This move expands into shuttle buses and commercial chassis. Management updates on integration progress and market growth potential will follow.

Electric School Bus Demand

Electric models accounted for 7.5% of new school bus sales in 2024, though recent quarters showed unit softness. As the leader in low- and zero-emission buses—with over 25,000 propane, natural gas, and electric units sold—Blue Bird eyes the pipeline for EPA Clean School Bus funding rounds for demand signals.

Strong Fundamentals

The company shows solid momentum: trailing twelve-month revenue growth of 11.6%, EPS growth of 23.4%, and EBITDA growth of 25.9%. Valuation at 15.4 times trailing earnings and 14.0 times forward earnings suits its double-digit growth.

Earnings results will reveal if operational leverage expands margins in a revenue-challenged environment or if top-line pressures erode recent profitability gains.