Universal Logistics Reports 12.5% Revenue Boost for Q1
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Universal Logistics Holdings well surpassed expectations with both revenue and earnings increasing year-over-year during the first quarter of 2024, the company reported April 25.
The Warren, Mich.-based asset-light transportation and logistics company posted consolidated net income of $52.5 million, or $1.99 a diluted share, for the three months ending March 31. That compared with $24.9 million, 95 cents, during the same time the previous year. Total operating revenue increased by 12.5% to $491.9 million from $437.4 million.
The gains were primarily driven by strength in the contract logistics segment, which helped the company beat expectations of Wall Street investment analysts, who had been looking for quarterly revenue of $416.5 million, or 73 cents, according to Zacks Consensus Estimate.
“Universal was not immune from the challenges in the transportation market,” Universal CEO Tim Phillips said during an April 26 call with investors. “However, our strategy of cycle complementary service offerings allows us to weather any storm. And even in this challenging environment, we continue to publish record results. We have consistently found ways to outperform throughout the cycle, led by our diversified portfolio of businesses and our unique contract logistics venture.”
Phillips noted that everything remains extremely competitive with shippers taking advantage of the current market conditions. But he has been hearing optimistic sentiments from customers regarding the back half of the year. He noted that despite not seeing the start of a market turnaround yet, the industry is at the bottom of the cycle.
“I’m confident that through the efforts today, we will be in a stronger position to take advantage of the freight rebound during the next up cycle,” Phillips said. “I’m very proud of our execution and results for the first quarter 2024.”
Phillips also has been seeing opportunities when it comes to the nearshoring trend as well as mergers and acquisitions. He noted the company has been in Mexico for a long time and has more recently worked to make those operations more agile to take advantage of those opportunities.
“Our strategy of offering diverse services while investing in our higher-margin businesses has been validated by our record EPS and margins despite the freight market weakness,” Phillips said. “Once again, I would like to extend a thank you to each member of the team at Universal [for their] contributions to a great quarter. I remain optimistic for the future and bullish on the remainder of 2024.”
Universal ranks No. 25 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 43 on the TT Top 100 list of the largest logistics companies.
Check out Transport Topics' updated Top 100 list of the largest logistics companies in North America, and explore how the industry's top players have adapted to a tough freight market and are preparing for the future. Tune in above or by going to RoadSigns.ttnews.com.
Trucking segment revenue decreased 12.6% to $69.7 million from $79.7 million. Load volumes declined 7.1% year-over-year, and the average operating revenue per load decreased 6.2%. Income from operations decreased slightly to $3.7 million from $3.8 million.
Revenue for the company-managed brokerage segment decreased 8.7% to $31 million from $34 million. Average operating revenue per load decreasing 12.2% year-over-year offset an 8% improvement in load volumes. The segment also experienced an operating loss of $2.5 million, compared with an operating loss of $400,000 a year earlier.
Contract logistics segment revenue increased 48.4% to $313.5 million from $211.3 million. The company had managed 71 value-added programs by the end of the quarter. That included a recent contract logistics award that ramped up in the first quarter and is expected to be complete by the end of 2024. Comparatively, Universal said it had 65 such programs at the end of Q1 2023. Income from operations increased 193% to $81.5 million from $27.8 million. The segment includes value-added and dedicated services.
Intermodal segment revenue decreased 30.9% to $76.7 million from $111 million. The revenue included accessorial charges, such as detention, demurrage and storage. Load volumes declined 14.1%, and the average operating revenue per load fell less than 1% on a year-over-year basis. The segment experienced an operating loss of $8 million, compared with operating income of $6.8 million one year earlier.
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