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Echo Global Logistics saw a large drop in profit but a smaller decline in revenue during the second quarter.
The Chicago-based logistics company said net income fell 81% to $1 million, or 4 cents per diluted share, from $5.1 million in the second quarter of last year, or 19 cents a year earlier.
Revenue fell 7% to $514 million from $553.8 million in the same quarter a year earlier.
The second quarter was one of the most volatile Echo has experienced, Doug Waggoner, Echo’s chairman and CEO, said during a July 22 conference call with investors and analysts.
“We saw what is normally an 18-month rate cycle play out in a single quarter,” Waggoner said.
For example, the company’s less-than-truckload volume was off 20% in April, 11% in May and just 2% in June. Similarly, Echo’s truckload volume also dipped but climbed back to an 8% gain in June compared to the same month a year earlier.
For the six months, the company lost $1.9 million, or 8 cents, compared with year-ago net income of $8.6 million, or 32 cents. Revenue was $1.06 billion compared with $1.09 billion last year.
The company ended the quarter with 2,450 employees, an 8.3% decline from the second quarter of last year. But as business bounced back, Echo rehired most of the employees it furloughed at the start of the slump.
“And we’ve started hiring again for sales,” Waggoner said.
Investors were pleased with the performance.
“It was better-than-expected performance from a team that is now battle-hardened,” said Kevin Silverman of Sterling Partners Equity Advisor, which holds Echo shares. “My guess is that they are gaining share from weaker competitors. When things get stressed is when competitive advantages show themselves.”
Despite declines, Echo still beat revenue expectations, Silverman said.
Truckload revenue fell 2.8% to $352.2 million from the same period a year earlier. Less-than-truckload revenue dropped 14.2% to $141.6 million from the second quarter of 2019.
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Full truckload business now accounts for 68.4% of Echo’s sales compared to 65.4% in the quarter a year earlier. Less-than-truckload revenue fell to 27.5% of its sales from 29.8%.
Despite the volatility during the quarter, the logistics market has rebounded enough for Echo to provide guidance for the current quarter.
“We are encouraged by our continued ability to take market share and expect revenue for the third quarter to be between $565 and $615 million,” said Kyle Sauers, Echo’s CFO. That would represent an increase from the $561.4 million in revenue the company posted in the third quarter of 2019.
Echo ranks No. 38 on the Transport Topics Top 50 list of the largest logistics companies in North America.
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