Auto Stoppages Push P.A.M. Transportation Into Red in Q4
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Labor stoppages at automotive manufacturers across the United States and a weak freight environment hammered profits at carrier P.A.M. Transportation Services in the final three months of 2023 and for the year as a whole, the company said.
Tontitown, Ark.-headquartered P.A.M. posted a net loss of $2.2 million, or 10 cents per diluted share, in the fourth quarter of 2023, after posting a profit of $18 million, or 81 cents per diluted share, in the same period a year earlier.
For the full year, P.A.M. posted net income of $18.4 million, or 83 cents per diluted share, down 79.7% compared with a profit of $90.7 million, or $4.04 per diluted share in 2022, it said Feb. 1.
“Our consolidated operating results for the three and 12 months ended Dec. 31, 2023, reflect a continued weak freight environment and the impact of the UAW strike against several customers in the automotive sector in which the company has significant exposure,” P.A.M. President Joe Vitiritto said.
A six-week United Auto Workers strike at Ford cut sales by about 100,000 vehicles and cost the company $1.7 billion in lost profits, the automaker said. General Motors said its pretax earnings took a $1.1 billion hit in 2023 as a result of the industrial action.
The UAW strike began Sept. 15, targeting assembly plants and other facilities at Ford, GM and fellow automaker Stellantis.
“Unlike previous UAW strikes, the approach taken in the 2023 strike was impactful to the majority of our auto customer base, including both auto manufacturers and suppliers,” Vitiritto said.
“While the strike ended by mid-November, the negative impact carried on through the typical holiday shutdowns with no post-strike surge in automotive business that we have sometimes experienced after past UAW strikes,” he added.
Revenue at P.A.M. in Q4 slumped 24.2% to $180.2 million from $237.6 million in the year-ago period.
The company’s truckload operations carried 94,776 loads in the most recent quarter, down 9.5% compared with 104,719 in the year-ago period. Its total miles in the quarter fell 18.1% to 43.97 million from 52.45 million in the same period a year earlier.
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Also, revenue earned per truck per week declined 16.7% to $3,722 in Q4 from $4,466 a year earlier.
P.A.M’s operating ratio in Q4 was 103.7, compared with 91 in the year-ago period. For the full year, the company’s operating ratio was 97.7, compared with 83.7 in 2022.
Operating ratio provides insight on how a company is doing in balancing its costs and revenue generation. The lower the ratio, the better a company’s performance.
P.A.M. failed to meet the expectations of analysts, who expected a quarterly profit of 20 cents per diluted share.
The company ranks No. 61 on Transport Topics Top 100 list of the largest for-hire carriers in North America as well as No. 21 on the list of the largest truckload/dedicated carriers.
At the start of 2023, P.A.M. ran 2,044 company-owned tractors, 407 owner-operated tractors and 7,784 trailers, according to TT data.
In the most recent quarter, P.A.M. ran an average of 1,938 company-owned trucks, compared with 2,056 in the year-ago period, as well 299 owner-operated trucks, compared with 405 a year earlier.
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