Universal Logistics Holdings Inc. (NASDAQ: ULH) blamed a trifecta of labor, litigation and a lackluster freight market for its weakened third quarter performance.
Missing revenue estimates by $12.11 million, Universal reported a net loss of $8.4 million, or $0.30 per share, on total operating revenues of $375.5 million.
This compares to net income of $15.1 million, or $0.52 per share, during the third quarter of 2018 on total operating revenues of $374.3 million.
The United Auto Workers General Motors strike, which began on September 16, 2019, shuttered activity at Universal’s dedicated and value-added operations supporting the automaker across the United States.
The impact of the strike is estimated to have reduced Universal’s weekly operating income by $2 million per week during the two weeks the strike impacted the third quarter 2019.
The company’s third quarter operating losses clocked in at $7.4 million.
Also included in the losses were pre-tax charges of $24.8 million for a previously disclosed legal settlement and an additional $2.2 million charge for unrelated ongoing litigation.
“The third quarter of 2019 proved to be very challenging for Universal,” stated Jeff Rogers, Universal’s Chief Executive Officer, in a letter accompanying the earnings release. “While navigating a soft freight environment, Universal’s third quarter was further impacted by the settlement of a personal injury case and then a labor strike at our largest customer.”
Universal provides a range of transportation and logistics services, including dry van and flatbed truckload, intermodal and freight brokerage, plus dedicated contract carriage and warehousing and distribution.
During the third quarter, intermodal was one of the only bright spots. Revenues increased $27.3 million to $93 million, up from $65.7 million during the same period last year. Acquisitions helped fuel revenue growth, along with fuel surcharges and an increase in the number of loads hauled.
Universal moved 154,600 intermodal loads in the third quarter, compared to 119,410 loads during the same period last year, while also increasing its average operating revenue per load, excluding fuel surcharges, by 7.3%.
The remaining divisions reported revenue declines.
Operating revenues from truckload services decreased $17.6 million, or 21.9%, to $62.6 million, compared to $80.2 million for the same period last year. The decrease in truckload services reflects a 22.7% decrease in the number of loads hauled, which was partially offset by a 1.6% increase in average operating revenue per load, excluding fuel surcharges.
During the third quarter 2019, Universal moved 56,510 loads compared to 73,117 during the same period last year.
Dedicated services during the reporting period decreased $3.5 million to $32.7 million compared to $36.2 million one year earlier. The decrease was blamed on the labor strike.
The strike also cut into value-added revenues, decreasing $0.7 million during the third quarter to $92.7 million.
Brokerage services revenue decreased $4.4 million, or 4.4%, to $94.4 million compared to $98.8 million one year earlier. The decrease was blamed on a 9.1% decrease in the average operating revenue per load, which was partially offset by a 5.0% increase in the number of brokered loads moved.
During the reporting period, Universal brokered 61,072 loads, compared to 58,147 loads during the same period last year, while the average operating revenue load fell from $1,643 per load in the third quarter 2018 to $1,494 during the same period this year.
As of September 28, 2019, Universal held cash and cash equivalents totaling $6.5 million, and $9.1 million in marketable securities. Outstanding debt at the end of the third quarter 2019 was $388.8 million, and capital expenditures during the quarter totaled $35.6 million.
Universal also announced a fourth quarter cash dividend of $0.105 per share of common stock. The dividend is payable on January 2, 2020 to shareholders of record on December 2, 2019.
Nursing Papers for Sale
In case you have an urgent order, make your Custom Essay Papers request and let the experts get down to business immediately. The agency provides Prewritten Essays and other Cheap Dissertation Writing Services that you may require.