Trucker sees 99% plunge in profit
Posted on Friday, October 19, 2007
USA Truck Inc. said Thursday a $ 3 million accident settlement along with sluggish freight conditions and higher fuel prices contributed to a 99 percent dip in third-quarter profit.
The Van Buren-based medium-haul carrier reported $ 16, 000 in profit, and no earnings per share, compared with $ 3. 42 million, or 30 cents per share, for the quarter that ended Sept. 30, 2006.
It missed the average earnings estimate of 14 cents per share from four analysts surveyed by Thomson Financial.
The company saw a 2. 7 percent increase in revenue at $ 122. 74 million, compared with $ 119. 8 million in the year-ago period.
USA Truck shares fell 16 cents, or 1. 1 percent, to $ 14. 34 per share Thursday on the Nasdaq.
We were “affected tremendously by the jury verdict, ’’ said Cliff Beckham, president and chief executive officer.
The company said fourthquarter earnings will also be affected by the same lawsuit.
USA Truck said the award translated to a 17 cents-pershare earnings hit.
The early August settlement deteriorated USA’s thirdquarter operating ratio to 98 percent compared with 92. 2 percent reported in the same year-ago period. Without the lawsuit, Beckham reported a 95 percent operating ratio.
A lower operating ratio means a carrier is efficiently managing its operating expenses and revenue.
“ Without that impact, our operations would have produced improved diluted earnings per share sequentially compared to the second quarter, ’’ the company said in a news release. “ That is something with which we are pleased given the challenging market conditions. ’’ The bellwether industry continues battling a slowdown.
The trucking industry faced another lackluster peak in its historically strong shipping season that runs between August and October, according to USA Truck’s news release.
Meanwhile, truck tonnage shows mixed results with a year-over-year drop in July, but a rise in August, as reported by the American Trucking Associations’ tonnage index. Analysts have predicted that the slowdown, which began in 2006, will continue into the second half of 2008.
Also, fuel prices began rising at the quarter’s end.
National diesel prices tracked below year-ago benchmarks of more than $ 2. 90 a gallon until the beginning of September, when diesel started its ascent above year-ago comparisons. Truckers paid $ 3. 04 per gallon on Monday, according to the U. S. Department of Energy data.
USA Truck said it continues improving financial returns rather than the more traditional revenue growth.
Beckham, a former chief financial officer who became president and chief executive officer in August, said the business is adapting itself to being “ a public company in the 21 st century.” Having a “ majority of outside owners means that in addition to managing a trucking company, we have to manage an investment on behalf of our shareholders, ’’ he said.
As a result, USA Truck in its release ticked off earnings boosting efforts such as a share buyback program, limited fleet growth, growth of non-asset based services and its owner-operator fleet along with increased revenue yield, or revenue per truck per week.
For the third quarter, USA Truck reported an average rate per mile of $ 1. 43, which translated into $ 2, 981 as the average revenue per truck per week. Those figures compare with $ 1. 46 per mile at $ 2, 976 per truck per week in the same year-ago period.
The carrier reported driving more total miles at 75, 966, compared with 71, 784 miles in the same year-ago period. It added 59 tractors to its average thirdquarter fleet of 2, 581 trucks.
Rhem Wood, a transportation analyst with Stephens Inc. in Glen Allen, Va., said the company’s efforts to decrease turnover helped improve its use of trucks.
USA Truck reported decreasing turnover rate by one-third to 108 percent compared with 152 percent in the third-quarter of 2006. Wood said the carrier did a good job navigating a tough freight environment in spite of the one-time charge. “ All in all, we see some signs of improvement, but material growth is largely dependent on a pickup in the [freight ] environment, ’’ he said.
To contact this reporter: lwhalen@arkansasonline. com
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