Universal Logistics Reports Record Results for Q3
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Universal Logistics Holdings Inc. set all-time records for total operating income and earnings per share during the third quarter of 2022, the company reported Oct. 27.
The Warren, Mich.-based asset-light transportation and logistics company posted net income of $48.5 million, or $1.84 a diluted share, for the three months ending Oct. 1. That compared with $10.3 million, 38 cents, during the same time the previous year. Total revenue increased by 13.5% to $505.7 million from $445.6 million.
“Our Q3 2022 numbers are not only a reflection of our continued commitment to expanding shareholder value, they’re also a testament to the cohesive team of associates at Universal that ensure the same goal of being the best,” Universal CEO Tim Phillips said during a call with investors. “I’m extremely satisfied with our progress over the first three quarters of ’22. Our focus on operations and customer service are at the center of our commitment to continuous improvement across all of our operating groups.”
The results surpassed expectations of Wall Street analysts, who had been looking for $1.35 per share and quarterly revenue of $494.3 million, according to Zacks Consensus Estimate.
“We continue to keep the pulse of the economy close as we are transitioning into the last quarter of the year with particular attention on our transportation portfolio,” Phillips said. “Spot market rates have slid rapidly over the course of the last six months and will put pressure on upcoming customer contract negotiations.”
Phillips added that while automotive production remains steady at most plants operated or serviced by Universal, parts and chip shortages continue to keep the auto sector from increased production. He also noted port fluidity has continued to improve because of decreased import shipments. But chassis remain tight in many markets.
“We are pleased with our progress in California,” Phillips said. “We successfully entered into an agreement with the Teamsters, which has helped bolster our port drayage fleet with quality drivers. While the equipment market has remained tight, our planning has secured hundreds of company trucks and chassis to support the growth in this market. We’re very excited to be able to offer our valued customers a consistent and seamless service of compliant drivers and trucks.”
Our planning has secured hundreds of company trucks and chassis to support the growth in [port drayage].
Universal Logistics Holdings CEO Tim Phillips
Total operating income increased 317% to $69.8 million from $16.7 million during the prior-year quarter. Total operating income and earnings per share exceeded records set in each of the previous two quarters.
“Our reported 2022 third-quarter performance once again reflects record results,” Phillips said. “Universal posted its highest operating margin and earnings per share in company history. This was the third quarter of meaningful margin expansion and operational efficiency progress.”
The trucking segment reported that revenue for Q3 decreased 7% to $99.6 million from $107.2 million from the 2021 period. Operating income decreased 29.9% to $4.79 million from $6.83 million. Average operating revenue per load increased 26.6% on a year-over-year basis, but load volumes declined 30.2% as the company rationalized underperforming operations in the segment. The segment revenue included $43.1 million of brokerage services and $9.1 million in separately identified fuel surcharges.
The contract logistics segment saw revenue increase 33.5% to $209.5 million from $156.9 million for the same period last year. Operating income increased 492% to $35.4 million from $5.98 million. The segment results includes 63 value-added programs compared to 61 last year. The dedicated transportation load volumes increased 11.4% over the same period last year. Included in contract logistics segment revenues was $7.1 million of losses incurred in connection with a previously announced program launch. The contract logistics segment includes value-added and dedicated services.
“In our contract logistics segment, internal operation reviews, quality improvement initiatives and new business guided the group to an outstanding quarter,” Phillips said. “The demand for vehicles remains strong. There was still bumps in the road, but production is tilted back to a somewhat normal state. Light truck and Class 8 production forecasts are solid for the fourth quarter and into 2023. We remain well positioned to service our current customers and have room for immediate expansion as needed.”
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Intermodal reported revenue increased 27.6% to $154.4 million from $121 million. Operating income increased 1,354% to $28.1 million from $1.94 million. Intermodal segment revenue included accessorial charges such as detention, demurrage and storage, which totaled $31.3 million during Q3. Average operating revenue per load increased 35.2%, but load volumes declined 14.8% year-over-year. Prior-year intermodal segment results included legal charges totaling $5.8 million in Q3 of 2021.
The company-managed brokerage segment saw revenue decrease 31.4% to $40.6 million. Operating income decreased 39% to $1.08 million from $1.77 million. Average operating revenue per load decreased 8.2%, and load volumes declined 31% on a year-over-year basis.
Universal Logistics Holdings ranks No. 26 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 43 on the TT Top 100 list of the largest logistics companies.
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