Universal Logistics Holdings, a leading provider of truckload, brokerage, intermodal, and dedicated services, has announced its second-quarter results, which exceeded Wall Street expectations. The company reported a 12% year-over-year increase in total revenue to 462.2 million, while earnings per share (EPS) increased 30% to 1.17.
The trucking segment was a standout performer, with revenue increasing 12.6% to $91.4 million. Despite a soft overall truckload market, the company's specialized heavy-haul wind business helped drive growth. CEO Tim Phillips attributed the segment's success to its focus on specialized freight, which is less affected by fluctuations in the broader truckload market.
The company's contract logistics segment also performed well, with revenue increasing 26% year over year to $263.6 million. This segment has been a consistent performer for Universal, with operating ratios below 90% for the past 10 quarters.
In contrast, the intermodal segment saw a decline in revenue, down 14.8% year over year to $78.1 million. However, Phillips noted that the segment had its best results for the year in the final month of the second quarter, and there is potential for a strong second half of 2024 if volumes are pulled forward in anticipation of higher tariffs on imports.
The brokerage segment was the only segment to report a decline in revenue, down 4.9% year over year to $28.1 million. Phillips attributed this to the challenging market conditions, which are expected to persist until excess capacity is eliminated.
Looking ahead, Phillips expressed optimism about the company's prospects, citing its diversified portfolio and focus on specialized freight. "We expect this to continue throughout the rest of the year as we have a full pipeline. This should be a secular headwind for years to come, allowing solid trucking segment performance, sheltered from fluctuations in broader truckload markets."
Overall, Universal Logistics' Q2 results demonstrate the company's ability to adapt to changing market conditions and deliver strong performance despite challenges in the broader truckload market.
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