U.S. Xpress Enterprises said Thursday its operating income in the fourth quarter rose to $21.1 million, nearly double the $12.5 million earned a year earlier, as the Chattanooga-based trucking company improved its operating ratios and improved its balance sheet after last June's stock offering.
But the company's fourth quarter net income still fell from $9.5 million a year ago to $7 million, or 14 cents per share, in 2018 due largely to a $10.7 million loss on the company's sale and exit from the cross border Mexico operations.
During a conference call Thursday, U.S. Xpress CEO Eric Fuller said the Mexico operations failed to keep pace with domestic U.S. shipments and required large capital investments the company decided against continuing as part of its companywide operational review.
"Our subsidiary had a unique model that required a high level of fixed investment, which never achieved the scale or scope necessary to drive an adequate return for shareholders despite the market backdrop," Fuller said. "As a result, we will transition into a more variable cost model to support cross-border freight with Mexico. This strategic decision reflects the latest step in the company's transformation as we methodically evaluate our capital allocation, improve our operational execution, and target industry-leading profitability."
Fuller is trying to pare expenses and improve the company's performance after shares of U.S. Xpress plunged last year from an initial price of $16.68 per share in June when the company returned to market trading on the New York Stock Exchange to a year-end closing price of only $5.61 per share.
After losing nearly two-thirds of its market value during the first six and a half months of its trading, U.S. Xpress stock has increased 38.3 percent so far in 2019 to close Thursday at $7.76 per share.
Despite the year-end adjustments that cut fourth quarter net income, Fuller called 2018 "the best year in our company's history, with record financial results, positive early year momentum, and an improved capital structure from our June initial public offering.
"We are well positioned to continue to methodically manage our capital allocation, improve our operational execution, and target industry-leading profitability," Fuller told analysts during a conference call this evening.
U.S. Xpress said revenue in the fourth quarter of 2018 increased by $38 million from a year ago to $469.2 million, primarily because of a 7.2 percent increase in the company's rate per mile, a 16.2 percent increase in brokerage revenues and other increases in fuel surcharge revenues.