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Marten Transport saw net income increase 8.8% during the third quarter of 2020, the carrier reported Oct. 15.
The Mondovi, Wis.-based supplier of time- and temperature-sensitive transportation services posted earnings of $18 million, or 22 cents a diluted share, for the three months ending Sept. 30. That compared with $16.6 million, or 20 cents a share, during the same time the previous year.
Total revenue increased by 0.5% to $216 million from $215 million the prior year.
Results were mixed in terms of Wall Street analysts’ expectations. Projections were for 20 cents per share and quarterly revenue of $220.35 million, according to Zacks Investment Research, which raised the rating for the company to “buy” from “hold.”
“Our talented and hardworking people continue to drive consistent, profitable growth, with our operating income for the first nine months of this year the highest in our history and up 17.3% over the same period of 2019,” CEO Randolph Marten said in a statement. “The operating income improvement is on top of strong growth in 2019 of 8.7% and in 2018 of 23.7%.”
The results include a gain of $1.7 million on the disposition of a facility as part of a program to expand and update its facilities. This gain increased earnings for the quarter by $1.3 million.
“We improved our truckload miles per tractor by 8.5% over the third quarter of 2019 and by 6.2% over the first nine months of 2019,” Marten said, “demonstrating our strength of quickly making data-driven decisions and adjustments utilizing our in-house operating technology.”
Net income increased 10.1% to $49.9 million, or 60 cents per diluted share, for the first nine months of 2020. That compared with $45.3 million, or 55 cents, for the first nine months of 2019.
“We also have been increasing and will continue to increase the compensation for our premium services within the tightening freight market,” Marten said. “We expect to build on our success in expanding the capacity we provide within our unique, multifaceted business model to support our diverse and growing customer base by offering the best jobs for the industry’s top, experienced drivers.”
KeyBanc Capital Markets Inc. noted in a report that underlying freight activity remains favorable and yields improved sequentially throughout the quarter given constrained capacity and pricing initiatives.
“Yields improved sequentially as elevated spot rates led to renewed pricing discussions with shippers,” Todd Fowler, industry analyst with KeyBanc, wrote in the report. “Contract renewals could approach the high end of historical ranges. Also, dynamics are resulting in increased dedicated opportunities, as evident in the nearly 20% year-over-year fleet growth. That said, driver constraints are restricting overall growth opportunities with the truckload fleet contracting sequentially, though nascent wage pressure is expected to be more than offset by higher rates.”
KeyBanc raised its earning per share estimates by 2 cents to 82 cents. The company noted that while results fell short of heightened expectations, it expects further yield improvement into next year as pricing initiatives are more fully realized.
“Looking forward, we expect yields to improve further into [the fourth quarter] as spot rates remain elevated and pricing initiatives are realized, with utilization likely remaining favorable,” Fowler wrote. “Excluding a facility sale in the current quarter, gains should tick down modestly with depreciation slightly higher.”
Roger Marten founded the company in 1946 when he was 17. He started by delivering milk and other dairy products from the Modena Co-op Creamery. His routes at that time primarily were in the Modena, Wis., area, where he was born and raised.
Marten Transport ranks No. 46 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and also No. 46 on the Transport Topics Top 50 list of the largest logistics companies.
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