Truckload And Brokerage Losses Hit Universal Logistics' Bottom Line

A softening freight market took a toll on Universal Logistics Holdings Inc. ULH, an asset-light provider of customized transportation and logistics solutions. 

The company reported second-quarter 2019 net income of $20 million, or $0.70 per share, a 12.9 percent increase over the same period last year. Universal also reported second-quarter 2019 operating revenues of $383.2 million, a 4.7 percent increase over the same period last year.

But the Q2 earnings also reflected losses, specifically in the company's truckload and brokerage divisions.

Universal provides a range of transportation and logistics services, including dry van and flatbed truckload, intermodal and freight brokerage, plus dedicated contract carriage and warehousing and distribution. 

The company took a hit on truckload services, revenues clocked in at $64.8 million, compared to $82.7 million for the same period last year. That reflects an 18 percent decrease in the number of loads hauled and a 4 percent decrease in average operating revenue per load.

Brokerage also suffered with revenues decreasing $3.1 million, or 3.4 percent, to $89.4 million compared to $92.5 million one year earlier.

Intermodal services were a bright spot, increasing $39.0 million to $93.9 million in the second quarter of 2019, up from $54.9 million during the same period last year. The increase was attributed to an uptick in loads transported, a boost in fuel surcharges and revenues generated from acquisitions.

Dedicated and value-added services stayed about par with the same period last year, bringing in around $99 million and $35 million, respectively.

Universal updated its full-year revenue expectations for 2019 from $1.6 billion to $1.7 billion to $1.5 billion to $1.6 billion.

"Universal continued to deliver solid results in the second quarter of 2019," said Chief Executive Officer Jeff Rogers, "surpassing our strong first-quarter performance and achieving our 8 percent targeted operating margin. 

"We experienced some softness in trucking rates and volumes during the quarter, which was consistent across our industry, but overall we finished up reporting our best second-quarter revenue on record and our highest earnings per share ever," Rogers said. 

"We can clearly see the results of our acquisition strategy paying off and continue to look for additional opportunities that fit our existing lines of business," he continued. "While I do see signs of diminished demand in the spot market continuing into the second half of the year, we intend to stay disciplined in controlling our costs, maintaining our margin and always delivering excellent customer service."

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