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Universal Logistics posts record first quarter despite truckload decline

Universal Logistics reported a 16.1 percent decline in truckloads during the quarter. Photo: Truckstockimages.com

Universal Logistics (NASDAQ: UHL) reported its best-ever first quarter for revenue and earnings on April 25, as strength from its intermodal and brokerage divisions offset a decline its truckload business.

Warren, Michigan-based Universal’s net income rose by 65.8 percent year-over-year to $17.3 million during the first quarter of 2019. Earnings per share came in at $0.61, beating analysts’ estimates of $0.56.

Operating revenues hit $377.4 million during the quarter, a 12 percent increase compared to $335 million in the first quarter of 2018. Universal increased its operating margin to 7 percent, compared to 5.1 percent in the first quarter of 2018.

“2019 is off to a solid start,” Universal CEO Jeff Rogers said in a statement. “We hit our target for operating margin in the first quarter, which is historically our toughest quarter, and we see this as a very positive start to the year. The first quarter of 2019 was also Universal’s best first quarter ever in terms of top-line revenues and earnings.”

The first quarter earnings followed record fourth quarter 2018 earnings that Universal reported in February.

Overall, Universal’s transportation segment, which includes truckload, brokerage and intermodal, reported a 23.9 percent increase in operating income, to $12.5 million compared to a year earlier. Operating revenue rose by about 20 percent to $246.7 million.

Net income surged in the logistics segment, increasing by more than 80 percent, to $13.8 million. Operating revenue was flatter, increasing from $128.6 million to $130 million.

Intermodal services revenue hit $91.2 million, more than double the $44.6 revenue in the first quarter of 2018. Acquisitions made during 2018 contributed $40.6 million of that revenue, while Universal said average revenue per load also increased by 12.8 percent.

Operating revenue from truckload decreased by nearly 15 percent to $65.7 million, compared to $77.2 million during the first quarter of 2018. Universal said this reflected a 16.3 percent decrease in loads – to 61,092 from 72,966.

Brokerage services posted a 9.8 percent increase in revenue to $85.9 million in the first quarter, largely because of a 16.5 percent increase in brokerage loads moved. It offset a 7.1 percent decline in revenue per load.

Value-added services had a small decrease in revenue, from $98.1 million to $97.1 million during the quarter.

Universal will hold a call with analysts on April 26 to discuss the company’s first-quarter results.

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Nate Tabak, Canada Correspondent

Nate Tabak is a journalist, editor and producer in Toronto. He covers Canada for FreightWaves, with a keen interest on the cross-border economic relationship with the United States. Nate spent seven years working as an investigative editor and reporter based in Kosovo. He covered everything from corruption to the country’s emerging wine industry. He also reported across the Balkans and investigated Albania’s multibillion-dollar marijuana industry with a grant from the Pulitzer Center on Crisis Reporting. Nate grew up in Berkeley, Calif. He enjoys exploring Toronto with his wife and is always looking forward to his next meal.

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