Profits at Universal Logistics Holdings Inc. fell 42% year-over-year despite 9.2% growth in revenue during the same period, which the company acknowledged was due to problems with a few of its large value-added programs.
Net income was $4.3 million or 15 cents per share, matching the Bloomberg News consensus forecast of industry analysts. However, one year ago the numbers were $7.5 million or 26 cents.
Nevertheless, revenue increased to $284.4 million from $260.4 million a year ago, consisting of growth in the truckload, dedicated, intermodal, freight brokerage and value-added services divisions. While CEO Jeff Rogers expressed his excitement at the higher revenue, he was critical of the problems with higher expenses.
“Despite numerous positive signs, we are still facing real challenges at a few of our large value-added programs. We have experienced certain production issues and ongoing launch costs that have depressed the performance of these operations. Although we are making progress, additional improvement is required in order to reach the level of profitability that we expect,” he said in a statement.
Universal Logistics handled more loads in all its divisions, up 1.5% in truckload, 11% in brokerage, 2.7% in intermodal and 13% in dedicated.
While the volume and revenue showed improvement year-over-year, the results were not as bright for the operating income — the amount after deducting expenses.
Transportation operating income, combining truckload, brokerage and intermodal services, rose 7.9% to $6.4 million. However, logistics operating income, consisting of value-added and dedicated services, fell 51% to $4.2 million.
Companywide operating income dropped 34% to $9.2 million.
Universal Logistics Holdings ranks No. 30 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. It also ranks No. 36 on the Transport Topics Top 50 list of the largest logistics companies in North America.