Four Fleets Post Higher 1Q Profits, Citing Demand, Rates, Fuel Prices

Four of five trucking companies announced improved first-quarter profits last week that rose with help from factors such as stronger demand, higher rates and lower fuel prices.

John Sommers II for Transport Topics

Werner Enterprises and Knight Transportation reported higher first-quarter earnings, aided from all three factors. Net income rose 61% to $23.1 million, or 32 cents per share, at Werner, and Knight improved 55% to $29.6 million, or 36 cents.

Leasing and supply chain specialist Ryder boosted net income 9% to $52.9 million, or 99 cents, as truck leasing and rental business grew. Lower fuel costs and asset sales helped Heartland Express to raise net income 25% to $17.6 million, or 20 cents.

However, acquisition-related costs totaling $12.7 million reduced Forward Air’s net income by more than half to $4.8 million, or 16 cents.

“Consistent with what we have heard from other carriers and truck brokers, Knight indicated that the spot market was notably weaker than in the prior year,” said a report from Allison Landry, a Credit Suisse analyst. “In contrast, during the first quarter of 2015, the company experienced one of the most consistent freight demand environments it has ever seen during the first quarter.”

Her report noted that carrier officials believe shippers have been effective in securing volume commitments by paying higher rates.

Werner and Knight also commented that early April demand continues to be good. An increase is expected in a few weeks when the produce and beverage shipping season begins, Knight CEO David Jackson said.

Werner’s revenue per tractor climbed 5.5%, including 3.5% more revenue per mile. Revenue rose less than 1% at Werner to $495.7 million, and fuel costs dipped $38.3 million.

Revenue at Knight jumped 25% to $257.2 million, including growth from an acquisition late last year and logistics expansion that included 53% more brokerage business. Revenue per tractor rose 4.7%.

Both companies also said that driver wage and equipment-related costs continue to rise.

Werner Enterprises Inc., in Omaha, Nebraska, ranks No. 14, and Phoenix-based Knight Transportation Inc. is No. 31 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers. Miami-based Ryder System Inc.’s supply chain unit is No. 11, Heartland Express Inc. in North Liberty, Iowa, is No. 33 and Forward Air Corp. of Greenville, Tennessee, stands at No. 46.

Landstar System Inc. in Jacksonville, Florida, (No. 10) and Covenant Transportation Group Inc. in Chattanooga, Tennessee, (No. 43) reported results after TT went to press last week. Both companies during the first quarter said year-over-year results would top the 2014 period.

Revenue at Ryder was $1.57 billion, a 3% decline that reflected lower fuel prices. Excluding fuel costs that are directly passed through to customers, revenue rose 3% to $1.3 billion.

Ryder CEO Robert Sanchez said, “We anticipate continued strong performance in commercial rental, efficiencies from our maintenance productivity initiatives and accelerated growth in our full-service lease fleet.”

A 16% drop in revenue at Heartland to $187.5 million was tied to a $19.8 million drop in fuel-surcharge revenue. A $10.2 million gain from asset sales helped results. Heartland’s statement didn’t comment on driver or freight trends.

Airfreight specialist Forward Air raised revenue 20% to $205.9 million, aided by acquisitions of ex-rival Towne Air and drayage fleet Central States Trucking. Net income excluding the acquisition charges improved to $12.1 million.