Despite increased sales and growth in its truck fleet this summer, U.S. Xpress Enterprises reported operating losses bigger than what analysts had expected in the third quarter, largely due to a jump in claims expenses during the period.
The Chattanooga-based trucking giant said Thursday it lost $22.7 million, or 38 cents per share, in operating income during the three months ending Sept. 30. The quarterly loss was more than four times as much as the 9 cents per share loss expected by Wall Street and was much higher than the penny-per-share loss the company reported a year ago in the same period.
In response, shares of U.S. Xpress traded lower after the market closed Thursday, even after the company’s stock had already dropped by more than 61% so far this year. Eric Fuller, CEO for U.S. Xpress, said the company is cutting $28 million in expenses through staff reductions and other cost-cutting measures this year to help get the trucking company back in the black.
“During the third quarter, we were successful growing our overall fleet size, sequentially improving utilization in our OTR (over the road) division and taking actions to reduce costs throughout the company,” Fuller said in the quarterly earnings report. “However, quarterly progress on our initiatives was outweighed by elevated claims expense primarily due to recent unexpected and adverse developments in two claims from prior years, along with certain one-time costs in the quarter.”
Operating revenue in the third quarter for U.S. Xpress grew by 11.5% from a year ago to $547.8 million. The increase was primarily from a 12.1% increase in average available tractors combined with a 9% increase in average truckload rate per mile.