Universal Logistics Announces Record Third Quarter Results
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Universal Logistics Holdings Inc. set all-time records for total operating income and earnings per share during the third quarter of 2022, the company announced Oct. 27.
The Warren, Michigan-based transportation and logistics company posted net income of $48.5 million, or $1.84 per diluted share, for the three months ending Oct. 1. This compares to $10.3 million, 38 cents, during the same period the previous year. Total revenue increased by 13.5%, from $445.6 million to $505.7 million.
“Our third quarter 2022 numbers are not only a reflection of our continued commitment to increasing shareholder value, they are also a testament to the cohesive team of partners at Universal who are driving the same goal of being the better,” said Universal CEO Tim Phillips. a call to investors. “I am extremely pleased with our progress in the first three quarters of 22. Our focus on operations and customer service is central to our commitment to continuous improvement across all of our operating groups.
The results beat expectations of Wall Street analysts, who were looking for $1.35 a share and quarterly revenue of $494.3 million, according to Zacks Consensus Estimate.
“We continue to keep the pulse of the economy close as we enter the final quarter of the year with a particular focus on our transportation portfolio,” Phillips said. “Spot market rates have fallen rapidly over the past six months and will put pressure on future contract negotiations with customers.”
Phillips added that while auto production remains steady at most factories operated or serviced by Universal, parts and chip shortages continue to prevent the auto sector from ramping up production. He also noted that the fluidity of ports has continued to improve due to the decrease in import shipments. But frames remain tight in many markets.
“We are pleased with our progress in California,” Phillips said. “We have successfully concluded an agreement with the Teamsters, which has reinforced our port drayage fleet with quality drivers. While the equipment market remained tight, our planning secured hundreds of trucks and enterprise chassis to support the growth of this market. We are very pleased to be able to offer our valued customers a consistent and seamless service from compliant drivers and trucks. »
Our planning has secured hundreds of company trucks and chassis to support the growth of [port drayage].
Tim Phillips, CEO of Universal Logistics Holdings
Total operating income increased 317% to $69.8 million from $16.7 million in the prior year quarter. Total operating profit and earnings per share exceeded the records set in each of the previous two quarters.
“Our reported performance in the third quarter of 2022 once again reflects record results,” Phillips said. “Universal posted its highest operating margin and earnings per share in company history. This is the third quarter of significant margin expansion and improved operating efficiencies.”
The trucking segment reported that third-quarter revenue decreased 7% to $99.6 million from $107.2 million from the 2021 period. Operating profit decreased by 29.9%, from $6.83 million to $4.79 million. Average operating revenue per load increased 26.6% year over year, but load volumes fell 30.2% as the company streamlined underperforming operations in the segment. Segment revenue included $43.1 million from brokerage services and $9.1 million from separately identified fuel surcharges.
The contract logistics segment saw revenue increase 33.5% to $209.5 million from $156.9 million for the same period last year. Operating profit increased by 492%, from $5.98 million to $35.4 million. Segment results include 63 value-added programs compared to 61 last year. Dedicated transport load volumes increased by 11.4% compared to the same period last year. Revenue from the contract logistics segment included $7.1 million of losses incurred in connection with the launch of a previously announced program. The contract logistics segment includes value-added and dedicated services.
“In our contract logistics segment, internal operations reviews, quality improvement initiatives and new business drove the group to an outstanding quarter,” Phillips said. “Demand for vehicles remains strong. There were still bumps in the road, but production returned to a somewhat normal state. Light truck and Class 8 production guidance is strong for the fourth quarter and into 2023. We remain well positioned to serve our current customers and have room for immediate expansion if needed.
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Reported intermodal revenues increased by 27.6%, from $121 million to $154.4 million. Operating profit increased by 1,354% from $1.94 million to $28.1 million. Revenues from the intermodal segment included ancillary costs such as detention, demurrage and warehousing, which totaled $31.3 million during the third quarter. Average operating revenue per load increased 35.2%, but load volumes decreased 14.8% year-over-year. Prior year intermodal segment results included legal fees totaling $5.8 million in the third quarter of 2021.
The business-managed brokerage segment saw its revenue decline 31.4% to $40.6 million. Operating profit decreased by 39%, from $1.77 million to $1.08 million. Average operating revenue per load decreased 8.2% and load volumes decreased 31% year over year.
Universal Logistics Holdings ranks 26th on the Transport Topics Top 100 list of the largest for-hire carriers in North America and 43rd on the TT Top 100 list of the largest logistics companies.
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