Universal Logistics Holdings Inc. surpassed Wall Street expectations in the fourth quarter, despite revenue decreases across the firm’s trucking, intermodal and brokerage segments.
“The outlook for 2024 remains a bit murky with a variety of signals from various market verticals,” Tim Phillips, CEO of Universal Logistics Holdings, said in a call with analysts on Friday. “We’re not ready to predict a rise in volume from the current environment. We can explore potential pathways through the lens of our customers. The prognostication throughout the earning season favors an uptick in the second half of 2024, which we also believe to be a possibility.”
Universal Logistics (NASDAQ: ULH) reported total operating revenue of $390.9 million in the quarter, a 14.8% year-over-year (y/y) decrease. The company beat Wall Street analysts’ revenue estimates of about $377.3 million.
Fourth-quarter earnings per share was 81 cents, a 36% y/y decrease compared to the same year-ago quarter. Earnings per share exceeded Wall Street estimates of 71 cents in the quarter.
Universal Logistics is a Warren, Michigan-based truckload transportation, intermodal and logistics provider across the U.S, Mexico, Canada and Colombia. The company has more than 10,000 employees.
The company reported fourth-quarter and full-year 2023 earnings after the market closed on Thursday. Full-year operating revenue was $1.66 billion, an 18% y/y decrease compared to 2022.
Revenue from truckload services in the fourth quarter decreased 15% y/y to $46 million, from $54 million for the same period last year. Full-year 2023 truckload revenue came in at $213.8 million.
The decrease in truckload services reflects a drop in the number of loads hauled, the company said. During the fourth quarter, Universal moved 43,468 loads compared to 45,233 during the same period last year, a 14% y/y decline.
The average revenue per load excluding fuel charges in the quarter was $1,673, a 9% y/y decline compared to 2022. The average number of tractors in the trucking segment declined 7.8% y/y to 828, while average length of haul decreased 5.7% y/y to 399 miles.
“As a whole, Q4 productions of Class 8 truck plants we service were negatively affected by the UAW strike and estimated to have cost the companies somewhere in the neighborhood of $2.2 million in mixed operating income,” Phillips said.
Universal’s fourth-quarter intermodal revenue decreased 31% y/y to $85.4 million, continuing to be affected by lower import volumes on the West Coast, Phillips said. Full-year intermodal revenue was $375 million, a 37% y/y decrease.
In the fourth quarter, intermodal load count was up 1.8% y/y at 118,553. The number of tractors in the segment declined 22% y/y to 1,830.
“Pricing and volume continue to be the storyline with a slight sequential deterioration of revenue,” Phillips said. “While load count was up 1.8%, this was more than offset by a 19.9% y/y decline in revenue per load excluding fuel, as the market remained extremely competitive.”
Brokerage services decreased 23% y/y to $58.1 million during the fourth quarter due to strong headwinds in the trucking industry, Phillips said. Full-year 2023 brokerage revenue declined 34% y/y to $244 million.
“A sluggish freight environment with a muted peak season led to an extremely competitive spot freight environment in the quarter,” Phillips said.
Universal Logistics’ dedicated segment reported revenue of $85.5 million in the fourth quarter, a 3% y/y increase. Full-year revenue increased 5.9% y/y to $344 million.
“In our contract logistics segments, the number of active value-added programs continued to increase and finish the quarter at 71 programs,” Phillips said. “We continue to launch new programs in a variety of verticals.”
For 2024, Universal Logistics’ capital expenditures will be in the $480 million to $500 million range.
“Included in our capital expenditure estimate are two large contract logistics projects that require an upfront capital investment totaling $220 million,” Jude Beres, Universal Logistics CFO, said during the call. “We anticipate making this investment over the course of 2024 in anticipation of having these programs ready for a Q1 2025 launch. These two projects account for nearly half of our total anticipated 2024 guidance.”
Beres also said they are expecting to invest $70 million in strategic real estate purchases and facility upgrades for the company’s terminal network.
“These upgrades will primarily support our intermodal operations,” Beres said. “The remaining $200 million or so will be for rolling stock, which includes tractors and trailers, as well as material handling equipment.”
In January, Universal Logistics announced a $50 million expansion into the greater Roanoke, Virginia, area to increase its market share in the Class 8 truck parts logistics sector.
Universal Logistics announced Thursday that its board declared a cash dividend of $0.105 per share of common stock. The dividend is payable to shareholders of record at the close of business on March 4 and is expected to be paid by April 1.
| Universal Logistics Holdings | Q4/23 | Q4/22 | Y/Y % Change |
| Operating Revenue | $390.9M | $458.7M | (14.8%) |
| Operating income | $34.1M | $48.1M | (29.2%) |
| Operating margin % | 8.7% | 10.5% | (17%) |
| Trucking | $75.2M | $88.9M | (15.5%) |
| Intermodal | $85.4M | $123M | (30.6%) |
| Contract Logistics | $201.3M | $205.5M | (2%) |
| Company-managed brokerage | $28.1M | $39.5M | (29.1%) |
| Earnings per share | $0.81 | $1.27 | (36.2%) |