Universal Reports Revenue Decline Amid Q3 Headwinds
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The Warren, Mich.-based asset-light transportation and logistics company posted net income of $23 million, or 88 cents a diluted share, for the three months ending Sept. 30. That compared with $48.5 million, or $1.84, during the same time the previous year. Total operating revenue decreased by 16.7% to $421.3 million from $505.7 million.
“Although our individual operating segments experienced varied results, Universal as a whole delivered a solid financial performance for the third quarter of 2023,” Universal CEO Tim Phillips said. “In this extremely challenging freight environment, depressed volumes and low rates continue to exert downward pressure on the results of our intermodal and company-managed brokerage segments.”
Phillips added that the trucking segment experienced similar macro-level factors. But he also noted that a strong performance in the wind-energy business enhanced the overall financial results in the segment.
“The highlight of Universal’s third quarter was the recurring, strong performance in our contract logistics segment,” Phillips said. “Although we are acutely aware of the risks posed by ongoing union labor disruptions, our contract logistics solutions continue to be in high demand by our OEM customers in automotive and other industries. We believe that Universal’s diversified service offerings continue to differentiate us in the market.”
The results were mixed in terms of Wall Street expectations. Analysts had been looking for $1 per share and quarterly revenue of $416.6 million, according to Zacks Consensus Estimate.
Trucking segment operating revenue decreased 2.5% to $97.1 million from $99.6 million during the same time last year. The average operating revenue per load increased 13.3%, while load volumes declined 13.1%. The segment revenue also included $28.8 million of brokerage services, compared with $43.1 million during the 2022 period. Operating income increased 36.9% to $6.56 million from $4.79 million.
Contract logistics revenue decreased 0.7% to $208.1 million from $209.5 million during the year-ago quarter. The company managed 73 value-added programs compared with 63 last year. The revenue also included $9.1 million in separately identified fuel surcharges from dedicated transportation services, compared with $11.3 million during the same period in 2022. Income from operations decreased 0.8% to $35.1 million from $35.4 million.
Intermodal revenue dropped 43.9% to $86.6 million from $154.4 million. The average operating revenue per load decreased 24.7%, and load volumes fell an additional 11.8% on a year-over-year basis. Intermodal segment revenue also included other accessorial charges such as detention, demurrage and storage. Income from operations fell to a loss of $4.32 million from a gain of $28.1 million during the same time last year.
The company-managed brokerage segment reported revenue decreased 30.8% to $28.1 million from $40.6 million. The average operating revenue per load decreased 11.1%, while load volumes decreased 12.3%. Income from operations fell to a loss of $1.07 million from a gain of $1.08 million.
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