Universal Logistics misses on Q3 EPS and revenue forecasts

Universal Logistics Holdings reported a 1.3% increase in operating revenue to $426.8 million in the third quarter.

The company also reported earnings per share of $1.01 per in the third quarter.

However, Universal Logistics posted year-over-year decreases in its trucking, brokerage and intermodal segments, and shuttered its company-managed brokerage operation in the quarter.

“Universal, once again, delivered solid results in the third quarter 2024. We grew top-line revenues by 1.3%, delivered a double-digit operating margin, and increased our earnings per share by 14.7% compared to the same period last year. This was accomplished while going through one of the most prolonged freight recessions I have ever experienced,” CEO Tim Phillips said during a call with analysts Friday.

Universal Logistics (Nasdaq: ULH) is a Warren, Michigan-based truckload transportation, intermodal and logistics provider. The company provides services across the U.S, Mexico, Canada and Colombia and has more than 10,000 employees.

The quarterly earnings were below Wall Street estimates of $1.18 per share. Third-quarter revenue came in lower than Zacks Equity Research analysts’ estimate of $460.8 million.

Universal Logistics’ guidance for the fourth quarter of 2024 calls for revenue between $450 million and $475 million and operating margins in the 9% to 11% range.

The company’s full-year guidance for 2025 called for operating revenues between $1.8 billion and $1.9 billion, and operating margins between 10% and 12%.

“For the full year of 2025, we are also expecting capital expenditures to be in the $140 million to $160 million range before any purchases of strategic real estate,” Jude Beres, Universal Logistics CFO, said during the call.

In August, Universal Logistics closed its brokerage subsidiary Universal Capacity Solutions in Nashville, Tennessee, and laid off 125 employees.

The brokerage segment’s revenue declined 25.4% year over year in the third quarter to $42.4 million.

“[Universal Capacity Solutions] was a business that Universal Logistics acquired in 2009,” Beres said. “If you really look at our results over the past couple of years, in 2023 that business lost about $2.3 million operating at a 102% operating ratio. We were losing between $2 million and $3 million a quarter this year with really no end in sight.”

Universal’s trucking segment revenue decreased 10% to $87 million, compared to $97 million for the same period last year.

During the third quarter, Universal moved 36,909 loads compared to 43,996 loads during the same period last year, a 16% decline. Average operating revenue per load, excluding fuel surcharges, increased 9% year over year to $2,222.

“Our trucking segment has achieved solid results, despite the overall weakness in the truckload market. There’s still too much capacity in the market, and we expect truckload weakness to persist until we see some more capacity exit,” Phillips said.

The company’s intermodal segment revenue declined 11.8% year over year to $77.6 million.

“Our intermodal segment experienced a 13.2% decrease in volume, while rates increased 1.8% in the quarter,” Phillips said. “We continue to streamline the business with a focus on truck productivity and taking out costs where possible. Our focus is also on capturing volume in order to position ourselves for a strong turnaround when capacity does finally come out of the market and the rate environment improves.”

In September, the company acquired rail terminal operator Parsec for $194 million.

“We anticipate this acquisition to add approximately $230 million of top-line and nearly $30 million of additional EBITDA [earnings before interest, taxes, depreciation and amortization] annually,” Phillips said.

Universal Logistics also announced a cash dividend of 10.5 cents per share of common stock that will be payable to shareholders on Dec. 2.