U.S. Xpress Enterprises, Inc. nearly doubled its operating income in the second quarter as the Chattanooga-based trucking firm capitalized on its technologies to improve freight efficiency and grew its revenues with more truckload shipments of grocery and other items during the coronavirus pandemic.
U.S. Xpress, the nation's fifth largest asset-based truckload carrier by revenue, said Tuesday its operating income totaled $16.3 million on sales of $422.5 million. In the previous year, U.S. Xpress reported operating income of $8.8 million on revenues of $413.9 million.
Adjusted net income totaled $9.5 million, or 18 cents per diluted share, which was triple the results from the previous year.
Eric Fuller, CEO of U.S. Xpress, said he expects continued improvement in the quarters ahead as the company implements more of its digital fleet to provide better shipping efficiency to improve operating margins and thereby retain more drivers.
"We are beginning to see the tangible, financial benefits of our strategic initiatives focused on utilizing technology to improve our processes, accelerate the velocity of our business, improve our customers' and drivers' satisfaction, and lower our costs," Fuller said in the second quarter earnings results released after the market closed.
Fuller said the digital fleet that U.S. Xpress has developed over the past couple of years uses artificial intelligence to recruit, plan, dispatch and manage shipments. The digital freight brokerage system launched a pilot fleet with a small number of trucks in the fourth quarter of 2019.
"The test was successful and we expanded the pilot fleet to approximately 100 trucks in the first quarter," Fuller said. "Given the positive results of the first quarter pilot we moved to a full production model, scaling the business to approximately 400 trucks in the second quarter of 2020."
Fuller said he expects even more gains in subsequent quarters and, despite the economic and health challenges presented by the coronavirus that could limit some shipments, he said U.S. Xpress is well poised to serve the growing food and grocery market and to capitalize on the falloff in the number of carriers and truckers on the road.
"While the economic outlook is somewhat uncertain, we remain very positive given the many positive given the many opportunities we have in front of us to improve our profitability," Fuller said.
Shares of U.S. Xpress, which fell by more than two-thirds last year after the company's stock debut in June 2019 at more than $16 per share, dropped in March to as low as $2.78 per share when the pandemic first shut down many businesses.
U.S. Xpress closed Tuesday ahead of the new earnings report at $6.81 per share in trading on the New York Stock Exchange. In after-market trading after the favorable earnings report, U.S. Xpress was trading up by more than 4.2% to $7.10 per share.