Universal Logistics Holdings posted second-quarter revenue decreases in its trucking, brokerage and intermodal segments due to declines in freight volumes and rates, company officials said.
Operating revenue in Universal Logistics’ trucking division decreased 24% year over year (y/y) to $81.2 million, compared to $106.5 million for the same period last year.
Total revenue in the quarter was $412.5 million, a 22% y/y decline, and missed Wall Street estimates of $448 million.
“On the transportation trucking side of things, I do still see a very loose environment,” Tim Phillips, Universal Logistics CEO, said during the company’s earnings call on Friday following the release of the results after the market closed on Thursday.
“Not only is that indicative of what we’re seeing on our intermodal product, but also the pricing we’re seeing on the brokerage side of things, it’s very soft. The number of opportunities flowing through the pipeline right now … they’re not what they were a year ago, and they’re very, very competitively priced.”
Warren, Michigan-based Universal Logistics (NASDAQ: ULH) provides truckload, brokerage, intermodal and dedicated services in the U.S., Mexico, Canada and Colombia.
The company posted second-quarter earnings per share of 90 cents, missing analysts’ estimates of $1.01 per share. Second-quarter EPS decreased 47% y/y compared to the same period in 2022.
“Volume headwinds remain the storyline in our trucking segment,” Phillips said. “Overall load count was down 13.7% y/y, coupled with a 10.7% y/y decrease in revenue per load.”
During the second quarter, Universal’s trucking segment tallied 45,717 loads, compared to 52,986 in the same year-ago period.
The average operating revenue per load, excluding fuel surcharges, decreased 11% y/y to $1,646. The number of tractors during the second quarter decreased about 1% y/y to 905, while the average length of haul fell 4% to 382 miles.
Universal’s second-quarter intermodal revenue decreased 42% y/y to $91 million, affected by lower import volumes at the Port of Los Angeles, Phillips said.
“Our Southern California operation saw import volumes coming through the port down nearly 20% over the same period in 2022,” Phillips said. “We are optimistic that the current inventory destocking with retailers will run its course through the next quarter or two and we will be in a more normalized atmosphere in 2024.”
The intermodal segment’s average revenue per load, excluding fuel, was down 15% y/y to $590. During the second quarter, the average number of intermodal loads declined 23% y/y to 112,925. The average number of tractors in the intermodal segment decreased y/y from 2,162 to 2,159.
Universal Logistics’ second-quarter 2023 operating revenues in its company-managed brokerage segment decreased 46% y/y to $29.6 million.
“Consistent with the overall freight environment, our brokerage opportunities have been extremely competitive,” Phillips said.
During the second quarter, the average operating revenue per load in the brokerage segment decreased 20% y/y to $1,599, while the number of loads fell 22% y/y to 17,814.
Phillips said the company is optimistic about freight-hauling opportunities improving in the cross-border automotive and Class 8 truck manufacturing spaces.
“Our contract logistics value-added pipeline remains full and we recently were awarded three new programs with an annual run rate of $10.5 million,” Phillips said. “These programs are in various stages of prelaunch and run, with the largest being a sizable operation serving the auto industry in Mexico. With over a 20% increase in nearshoring activity, this sizable win is another piece in our strategic growth objectives in Mexico.”
Universal Logistics also announced that its board declared a cash dividend of $0.105 per share of common stock. The dividend is expected to be paid in October to shareholders.
| Universal Logistics Holdings | Q2/23 | Q2/22 | Y/Y % Change |
| Operating revenue | $412.6M | $527.2M | (22%) |
| Operating income | $36.4M | $64.6M | (44%) |
| Operating margin % | 8.8% | 12.3% | (28%) |
| Trucking | $81.2M | $106.5M | (24%) |
| Intermodal | $91.5 | $156.8M | (42%) |
| Contract logistics | $208.8M | $207.3M | 1% |
| Company-managed brokerage | $29.5M | $55.1M | (46%) |
| EPS | $0.90 | $1.69 | (47%) |
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