Truckload carrier Pam Transportation Services saw a return to profitability on a consolidated basis as operating trends improved sequentially in the third quarter. The quarter started slow due to planned shutdowns across its automotive manufacturing customer base and was further crimped by a hurricane to close the period.
Pam (NASDAQ: PTSI) reported earnings per share of 11 cents, which came in ahead of a lone analyst estimate of 2 cents but declined 17 cents year over year. The quarter saw a 7-cent benefit from higher gains on equity holdings, which was partially offset by higher interest expense (a 3-cent headwind). Lower gains on equipment sales were offset by a lower tax rate.
“The quarter started off slow because of extended, but planned, down time from some of our biggest customers and ended slower than expected as we saw impacts to our business and volumes prior to Hurricane Helene,” President Joe Vitiritto said in a news release.
On a consolidated basis, the company posted its first operating profit in a year. However, its truckload segment recorded a fourth straight operating loss.
Truckload revenue (excluding fuel surcharges) fell 3.3% y/y as average trucks in service were down 1.4% and revenue per truck per week was down 1.6%. Loaded miles fell 2.6% and revenue per loaded mile (excluding fuel) was off 0.7%.
Revenue per truck per week did improve 5.2% from the second quarter.
The TL segment reported a 100.5% operating ratio (inverse of operating margin), which was 470 basis points worse y/y but 320 bps better than the second quarter.
Pam’s logistics segment reported a 19.2% y/y decline in revenue to $50.2 million. The company doesn’t provide gross profit margins for the unit or operating metrics like load counts and revenue per load.
Consolidated expenses declined 6.4% y/y but revenue was off 9.4%. As a percentage of revenue, depreciation expense was 200 bps higher y/y, salaries, wages and benefits expense was up 170 bps, and rent and purchased transportation expense increased 110 bps.
“Inflationary operating costs continue to materialize, but we are determined to minimize the impact to our business and focus on factors that we can control,” Vitiritto said. “We continue to see signs that the market is improving, and I am confident that we are moving closer to a more normal truckload market.”
Pam has generated $43.8 million in operating cash flow so far this year. It closed the quarter with $152.2 million in liquidity, which included cash, equity holdings and availability on its line of credit. Outstanding debt was up $27 million from the end of 2023 to $288.7 million.
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