U.S. Xpress Reports Mixed Q4
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U.S. Xpress Enterprises saw a revenue gain but drop in income for the fourth quarter of 2021, the company reported Feb. 9.
The Chattanooga, Tenn.-based truckload carrier posted a net loss attributable to controlling interest of $5.3 million, or a loss of 10 cents per diluted share, for the three months ending Dec. 31. That compared with a net income of $7.6 million, 15 cents, during the same time the previous year.
Total operating revenue increased by 16.7% to $531.6 million from $455.6 million.
The results were mixed compared with expectations by investment analysts on Wall Street, which had been looking for 8 cents per share and quarterly revenue of $517.90 million, according to Zacks Consensus Estimate.
For the full year, U.S. Xpress reported net income of $10.9 million, 21 cents a share, on revenue of $1.95 billion, compared with net income of $18.6 million, or 35 cents, on revenue of $1.74 billion in 2020.
“The fourth quarter was marked by several achievements, as our average tractor count increased year-over-year for the first time in six quarters, fueled by Variant, which grew its fleet to more than 1,500 tractors exiting the year,” U.S. Xpress CEO Eric Fuller said in a statement. “Meanwhile, our brokerage segment continued to grow load count and revenue while our dedicated division generated record revenue per tractor per week.”
Variant is a digitally dispatched and managed asset-based fleet that was launched in the second quarter of 2020. Its turnover, utilization and revenue per tractor per week during the second half of 2021 began to deteriorate with the trend accelerating in the fourth quarter.
“Despite these achievements, our consolidated earnings were disappointing primarily due to operational challenges at Variant that were negatively impacting our ability to scale profitably,” Fuller said. “Looking ahead to 2022, our priorities are restoring Variant’s revenue productivity and driver turnover to previous levels, lowering our overhead per tractor, and continuing to sequentially grow our overall fleet size.”
Variant leadership underwent a change while the technology and operations teams began reporting directly to Fuller in December. U.S. Xpress believes the deterioration in key metrics was primarily the result of growing the platform without the proper balance of technology and domain expertise. Since that time its key metrics have improved, including revenue per tractor per week.
“We built Variant purposely outside of U.S. Xpress with a team that had technology expertise, but not necessarily trucking expertise, and provided them with a mandate to build a technology-enabled fleet,” Fuller said. “For most of Variant’s history, this framework was successful, as the fleet grew rapidly and produced a better experience for drivers and customers while enhancing utilization, safety and revenue per tractor. However, as Variant began to achieve significant scale, we found that the team needed to shift their focus from idea generation to execution.”
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The truckload segment reported revenue increased 6.5% in the fourth quarter to $375.4 million from $352.4 million during the same time period the prior year. Operating income for the segment decreased 157.8% to a loss of $8.23 million from a positive $14.2 million the previous year. The segment includes over-the-road, dedicated and consolidated operations.
The over-the-road division experienced a 259 year-over-year increase in the average tractor count. The Variant fleet was the main driver of this growth. The average revenue per mile increased 14.6% year-over-year. But the average revenue miles per tractor per week declined by 20.0%. That contributed to average revenue per tractor per week declining by 8.3%, or $327.
The dedicated division saw the average number of tractors declined by 256 year-over-year. It did add 13 tractors from third quarter. The average revenue per mile increased by 14.4% year-over-year. That contributed to average revenue per tractor per week increasing by 13.1%, or $536 from the prior year period.
The brokerage segment reported revenue increased 46.5% to $111.9 million from $76.4 million the prior year. Operating income for the segment increased 281% to $3.12 million from $819,000 the previous year. The increase in revenue was driven by a 27.2% improvement in revenue per load and a 15.2% jump in load count.
U.S. Xpress ranks No. 21 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 47 on the TT Top 50 list of the largest logistics companies in North America.
