Universal Logistics Holdings’ second-quarter results showed a 12% year-over-year increase in total revenue to $462.2 million, while earnings increased 30% year over year to $1.17 per share.
The company surpassed Wall Street expectations of $461.4 million in revenue and EPS of $1.14.
“We grew top-line revenue by 12%, delivered a double-digit operating margin and increased our earnings per share by 30% compared to the same period last year,” CEO Tim Phillips said during an earnings call with analysts on Friday. “We did all this during one of the longest and deepest freight recessions I’ve experienced.”
Warren, Michigan-based Universal Logistics (Nasdaq: ULH) provides truckload, brokerage, intermodal and dedicated services in the U.S., Mexico, Canada and Colombia.
Universal’s trucking segment revenue increased 12.6% to $91.4 million, compared to $81.2 million for the same period last year.
During the second quarter, Universal moved 40,620 loads compared to 45,717 loads during the same period last year, an 11% decline. Average operating revenue per load, excluding fuel surcharges, increased 28.5% year over year to $2,115.
The average length of haul increased 2% year over year to 390 miles in the quarter, while the average number of tractors decreased 10% year over year to 815.
“The trucking segment performed well despite softness in the overall truckload market on the back of our specialized, heavy-haul wind business,” Phillips said. “We expect this to continue throughout the rest of the year as we have a full pipeline. This should be a secular headwind for years to come, allowing solid trucking segment performance, sheltered from fluctuations in broader truckload markets.”
Outside of specialized freight, the truckload market remains soft, Phillips said.
“Flatbed volumes were down once again and we did not see the increase in rates that we expected. We expect the weakness in the broader truckload market to persist until excess capacity comes out,” Phillips said.
As a percentage of revenue, operating margin in the trucking segment for the second quarter of 2024 was 4.8% compared to 5.4% during the same period last year.
Second-quarter revenue in Universal’s contract logistics segment increased 26% year over year to $263.6 million.
Phillips said the company is currently managing 68 value-added programs for customers as part of its contract logistics segment.
“Contract logistics remains our most consistent and profitable segment. This was a 10th straight quarter of operating ratios below 90% with six of the last 10 below 85%, and the last two were below 80%. We expect the strength in this segment to continue going forward,” Phillips said.
As a percentage of revenue, operating margin in the contract logistics segment for the second quarter of 2024 was 20.1%, compared to 15.7% during the same period last year.
Universal’s second-quarter intermodal revenue was down 14.8% year over year to $78.1 million.
“Our intermodal segment had its best results for the year in the final month of the second quarter,” Phillips said. “We could see a strong second half of 2024 if 2025 volumes get pulled forward in anticipation of higher tariffs on imports. There could be additional pull to get ahead of any labor disputes at the East Coast ports. Any increase in volumes will contribute to our profitability after streamlining the business and cutting costs.”
Intermodal load volume declined 4% year over year to 108,326 loads. Average revenue per load decreased 6% year over year to $555, while the number of tractors in the segment decreased 23% year over year to $1,656.
While intermodal volumes were down during the second quarter, Phillips said the company has noticed a slight “uptick” in import volumes arriving at West Coast ports.
“I would say that if I had to have one market that I’ve seen some uptick, based on those West Coast numbers, would be the inbound coming off the West Coast into Chicago,” Phillips said.
Revenues in the company-managed brokerage segment decreased 4.9% year over year to $28.1 million, and average operating revenue per load decreased 21.9% on a year-over-year basis.
“The brokerage market is extremely challenging and some experts do not expect it to recover until these excess capacities come out of the market sometime in 2026,” Phillips said. “Overcapacity continues to put a damper on pricing and squeeze our gross margins. We were able to take some share back in the quarter but had to sacrifice margins to do so.”
Universal Logistics declared a cash dividend of $10.5 cents per share of common stock on Thursday. The dividend is payable to shareholders of record at the close of business on Oct. 1.
Universal Logistics HoldingsQ2/24Q2/23Y/Y % ChangeOperating revenue$462.1$412.512%Operating income$47.1$36.429%Trucking revenue$91.4$81.212.6%Intermodal revenue$78.1$91.6(14.8%)Contract logistics segment$263.6$208.826.2%Company-managed brokerage revenue$28.1$29.6 (4.9%)Earnings per share$1.17$0.9030%Universal Logistics key performance operators. Revenue and operating income in millions.
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