Chattanooga-based U.S. Xpress reports first quarter loss, but Variant continues to grow

The Chattanooga-based trucking company U.S. Xpress Enterprises on Thursday reported a first quarter loss as costs escalated but shipping demand suffered from lockdowns in China and other supply chain challenges.

U.S. Xpress said it lost more than $8.9 million, or 18 cents per share, on revenues of $517.2 million in the first three months of 2022. A year earlier, U.S. Xpress earned nearly $2.7 million, 5 cents per share, on revenues of $450.8 million.

When adjusted for one-time and unusual expenses and write-offs, adjusted earnings were also down from a year ago but were generally more favorable and in line with analysts' expectations.

The Chattanooga trucking company continues to make adjustments in its growing Variant truck line, which the company has developed to give drivers more mileage and paycheck predictability and to be able get home more on the dates of their choice.

"During the quarter, we were successful in sequentially growing Variant's fleet 9% and improving Variant's revenue productivity by $325 per tractor per week with mixed results in Variant's other key metrics," U.S. Xpress CEO Eric Fuller said in an earnings release.

Fuller, who changed the leadership of Variant in December after the technology-based shipping venture failed to meet expectations, said he spent much of the past three months working in Atlanta to improve Variant performance.

"Variant is the growth engine of our company and is key for our future growth," Fuller told industry analysts in an earnings call Thursday evening.

Variant grew to 1,691 trucks at the end of the first quarter.

"Although we grew in the quarter, we didn't grow as much as we had liked," Fuller said.

From its Atlanta headquarters, the company has developed a suite of machine learning and artificially intelligent algorithms called the Variant Optimizer, which is designed to cut operating costs and boost driver satisfaction through "operations specialists," rather than fleet managers. Variant analyzes current and forecasted truck positions, telemetrics data and drivers' current and forecasted hours of service to better connect and utilize shipper orders.

Fuller also said he sees a more difficult economic road ahead for the trucking giant with higher costs and flat to declining shipping demand as the economy struggles with higher interest rates and consumers shift more of their spending from buying goods to spending more again on experiences as Covid-19 lessens.

"Looking ahead to the second quarter, we expect broader inflationary pressures to continue, which makes it critical to continue improving Variant's key metrics especially utilization and turnover," Fuller said.

- Compiled by Dave Flessner