Universal Logistics Holdings’ first-quarter financial results show year-over-year decreases in its trucking, brokerage and intermodal segments.
“Despite the significant headwinds we faced in our transactional transportation services, the transportation and logistics community saw a first quarter wrapped in inventory restocking, excess capacity and low demand for consumer goods,” 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. “While we felt significant price and volume pressure on our transportation services, our teams did an excellent job managing controllable costs, while delivering excellent customer service, and capitalizing on continuous improvement initiatives across the organization.”
Warren, Michigan-based Universal Logistics provides truckload, brokerage, intermodal and dedicated services in the U.S., Mexico, Canada and Colombia.
Universal (NASDAQ: ULH) reported first-quarter earnings per share of 95 cents, 1 cent less than Wall Street estimates but a 39% y/y decrease compared to the same year-ago quarter.
First-quarter operating income decreased $19.6 million to $38.2 million, compared to $57.8 million in the first quarter of 2022.
The company reported first-quarter total operating revenue of $437.4 million, a 16.5% y/y decline compared to 2022.
“While we fell short of last year’s record-setting performance, the first quarter of 2023 was Universal’s net best first-quarter financial performance on record,” Phillips said. “Demand for our contract logistics segments held firm throughout the quarter, and our diversification strategy is paying dividends in a depressed transportation environment.”
In the trucking segment, first-quarter 2023 operating revenue decreased 18.2% to $79.7 million, compared to $97.5 million for the same period last year.
Phillips said the trucking segment was negatively affected by “volume headwinds.” First-quarter trucking operating revenue decreased 18% y/y to $79.7 million.
“Overall load count was down 11.8%, coupled with an 8.8% decrease in revenue per load,” Phillips said. “Our open-deck load count was down 10%, steel and metal volumes were relatively flat year over year and pricing was still in positive territory.”
The company’s dry van load count was down 15% y/y in the first quarter, with a 30% y/y decline in retail and consumer goods freight.
Phillips said contracted freight remains over 80% of the company’s top-line revenue in trucking.
Universal’s contract logistics segment, which includes its value-added and dedicated services, saw a 4.8% y/y increase in first-quarter operating revenue to $211.3 million.
“In our contract logistics segments, the number of active programs grew to 65, which was a 3.2% increase over active programs in Q1 of 2022,” Phillips said. “There continues to be strong demand for outsource logistics services in a variety of spaces.”
Universal’s first-quarter intermodal revenue decreased 29.6% y/y to $111 million, affected by lower import volumes at ports across the country, Phillips said.
“The average revenue per load, excluding fuel, was down 18.7% [y/y] to $557 per load,” Phillips said. “The lack of import volumes had a direct effect on the number of loads hauled in the quarter, which fell 20.7% and contributed to a 29.6% decline in top-line revenue over the same period of 2022.”
Universal’s first-quarter operating revenues in the company-managed brokerage segment decreased 48% y/y to $34 million.
“Inflation and consumer spending created competitive pricing and less tender opportunities,” Phillips said.
Many of Universal’s customers in the retail space are taking a wait-and-see approach before ordering more inventory, while other sectors are showing some positivity, according to Phillips.
“[Retailers] are not willing to say that the second half of the year is going to be a big rebound,” he said. “We still remain optimistic on the automotive and Class A truck space and have had very positive conversations on the order books for agriculture, heavy machinery and aerospace, while the retail market and its overall inventory bloat remain concerning.”
|Universal Logistics||Q1/23||Q1/22||Y/Y % Change|
|Operating margin %||8.7%||11%||(21%)|
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