U.S. Xpress Enterprises, Inc. boosted its operating income in the third-quarter and said it expects to continue to boost profits as it expands its use of its Variant digital fleet.
The Chattanooga-based trucking company said Thursday its net income grew to $10.7 million, or 20 cents per share, after reporting a loss in the same period a year earlier. But the results were still short of Wall Street expectations by 3 cents a share, according to the average estimate of four analysts surveyed by Zacks Investment Research.
Despite the economic slowdown due to the pandemic this year, operating revenue for U.S. Xpress still grew slightly in the third quarter from $428.5 million a year ago to $431.5 million in the three months ended Sept. 30, 2020. With a continued rebound in the economy and more digitally recruited , dispatched and managed assets through Variant, U.S. Xpress President Eric Fuller said he expects the company results will continue to improve.
"This is an exciting time at U.S. Xpress as we transform our business with the goal of delivering not only peer levels of profitability but also deploy an operating model that is being purposefully built to organically scale over time," Fuller said. "The digital fleet business model, now branded as Variant, continues to prove out, maintaining a more than 20% advantage in utilization, an approximately 70% reduction in driver turnover, and substantially fewer accidents per million miles than the legacy. "
U.S. Xpress added about 100 tractors to the digital fleet in the third quarter and the company expects to transition another 400 of its under-performing tractors in its over the road fleet to the digital platform by the end of the first quarter of 2021 as part of our Phase 1 conversion of 900 tractors.
"We believe the efficiency and technology changes we are implementing are gaining momentum and position us to positively impact our profitability through next year," Fuller said.
Shares of U.S. Xpress, which traded up slightly Thursday ahead of the earnings announcement, initially fell by more than 15% in after hours trading following the earnings announcement.
--Compiled by Dave Flessner