Two Transport Firms, Truck Dealer Report Lower Second-Quarter Profits
Two transport companies and a major truck dealer reported lower second-quarter results.
Intermodal specialist Hub Group Inc. reported net income fell less than 1% to $18.5 million, or 51 cents per share, as revenue also was little changed, rising 1% to $900 million. Forward Air Corp. net income dropped 31% to $11.8 million, or 38 cents, because of costs to implement the acquisition of rival Towne Air. Rush Enterprises Inc. net income fell 1% to $19.6 million, or 48 cents, as rising costs kept pace with 12% higher revenue.
Net income in the year-earlier period was $18.7 million, or 51 cents, at Hub Group, a Chicago area company that ranks No. 8 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
Intermodal revenue was 2% higher at $465 million. Other results reported in the company’s Hub unit, included 8% higher truck brokerage revenue and 8% lower revenue at the Unyson Logistics business. The Hub unit’s operating income fell 9% to $22 million.
Hub’s other business unit, a brokerage specialist known as Mode, improved revenue by 1% and boosted profit before interest and taxes by 12% to $7.5 million.
Forward Air, ranked No, 34, generated 29% higher revenue at $249.7 million. Profit before interest and taxes fell 30% to $19.9 million, which reflected $6.9 million in costs related to the Towne Air acquisition.
Year-earlier net income was $17.2 million, or 55 cents, at the Greeneville, Tennessee-based company.
“It’s fair to say we underestimated the cost and time necessary” to integrate the acquisition while maintaining service levels, CEO Bruce Campbell said in a statement.
He also said the integration is 85% to 90% complete.
“Over the course of the third quarter, we will continue to right size headcount, evaluate non-core service offerings, drive improvements in productivity and rebalance the network,” he added.
Rush, based in San Antonio, posted revenue of $1.33 billion. New truck sales accounted for most of the revenue growth, rising to $917.9 million.
Rush Enterprises results reflected a 29% rise in new truck sales that outpaced industry growth during the quarter. Aftermarket services accounted for 63% of profit and increased revenue 6.7% as demand remained solid.
"Moderate freight growth driven by general economic improvement contributed to our strong financial performance this quarter, and we outpaced the industry in Class 8 truck sales again despite the decline in activity in the energy sector,” CEO Rusty Rush said in a statement.
Rush also noted that revenue has been hurt by reduced new truck sales in the energy sector.
“We expect this trend will continue throughout the remainder of the year,” he said.
