U.S. Xpress Enterprises Inc. on Wednesday reported a loss of $554,000, or one cent per share, in its second quarter.
The results were below what Wall Street analysts had forecast for the Chattanooga-based trucking giant, sending shares tumbling more than 12% in after-hours trading after the second quarter results were announced.
U.S. Xpress said the quarterly losses, adjusted for non-recurring gains, totaled 5 cents per share. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings in the quarter of 5 cents per share.
The company posted revenue of $553.7 million in the period, which was up from $475 million a year ago and topped Street forecasts.
"Second quarter highlights included sequential overall fleet growth and improved margins in our Brokerage segment and Dedicated division," Eric Fuller, president and CEO of U.S. Xpress, said in an earnings report. "However, these positive accomplishments were partially offset by higher net fuel and claims expense in the quarter, particularly in our OTR (over the road) division. While our Variant fleet grew to approximately 1,900 tractors, its results continued to lag due to lower utilization and higher turnover."
In a conference call with industry analysts Wednesday evening, Fuller said the company will continue to grow its truck fleet and utilization to realize more economies of scale and improve profit margins. As economic growth slows, Fuller said he expects major trucking companies like U.S. Xpress should pick up a bigger share of shipments.
"In terms of the overall market, we're expecting market demand to continue moderating primarily as inflation continues to pressure consumers," Fuller said. "In terms of capacity, we expect smaller carriers to exit the market during the second half of the year, not only as a result of declining rates but also increased delivery costs such as fuel expense and maintenance costs."
Fuller said U.S. Xpress is focused on improving the utilization and size of its digital Variant fleet while lowering fixed costs.
Fuller said he expects trucking rates per mile for the year will grow by "low double-digit levels," due primarily to higher fuel and maintenance costs.
- Compiled by Dave Flessner