Universal Logistics Holdings’ truckload, brokerage and intermodal segments all declined during the second quarter, but CEO Tim Phillips said he was pleased with the “anticipated direction of our current operations.”
On Thursday, Universal (NASDAQ: ULH) released its second-quarter financial results, reporting $258 million in revenues and earnings of 23 cents per share, which topped the consensus forecast of 17 cents per share.
“We entered the second quarter with substantial portions of business in flux or shut down because of the COVID-19 pandemic,” Phillips said during the company’s earnings call on Friday. “Despite the difficult sales environment, we secured new business and multiple verticals.”
Operating revenue declines during the second quarter included:
- Dedicated services, 49.7%.
- Truckload services, 37.5%.
- Brokerage services, 29.8%.
- Intermodal services, 11.7%.
Phillips added: “Our truckload group experienced several good wins in food and beverage and consumer goods, our logistics pipeline remains filled with opportunities building on our substantial first-quarter wins, our value-added and dedicated transportation service lines have been awarded over $140 million in new business over the past six months.”
Universal Logistics Holdings is a Warren, Michigan-based truckload transportation, intermodal and logistics provider throughout the United States, Mexico, Canada and Colombia. The company has more than 6,000 employees.
Universal Logistics’ operating margin and earnings before interest, taxes, depreciation and amortization (EBITDA) margin for the second quarter of 2020 were 4.2% and 11.7% of total operating revenues, compared to 8% and 12.6% respectively, in the second quarter of 2019.
For the full year, Universal has revised its expenditures forecast and is now expecting capital expenditures to be in the $100 million-$110 million range as the company completes two supercenter projects and invests in the equipment to service new business in its dedicated transportation service lines, officials said.
“If the current operating environment remains as it is today, we expect top line revenues to come in between $325 to $350 million and operating margins to be in the 6%-7% range,” said Jude Beres, Universal Logistics chief financial officer. “We expect to face a couple of headwinds during the third quarter. Margins and our contract brokerage business are currently under pressure due to an upside-down market.”
Beres added that, “with limited visibility as to the strength of the general economic recovery, our board of directors has decided not to declare a dividend during the quarter, but we’ll revisit the topic at its next regularly scheduled meeting in October.”