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U.S. Xpress Enterprises posted increased earnings on a modest revenue gain during the third quarter, the fleet announced Oct. 22.
The Chattanooga, Tenn.-based truckload carrier’s net income attributable to controlling interest was $10.7 million, or 20 cents per diluted share for the three months ending Sept. 30. That’s in stark contrast to a net loss of $1.4 million, or 3 cents per diluted share, in the 2019 period. Revenue rose 0.7% to $431.5 million versus $428.5 million the prior-year third quarter.
The results fell short of expectations by investment analysts on Wall Street, which had been looking for 23 cents per share and quarterly revenue of $442.04 million, according to Zacks Consensus Estimate.
“Through the third quarter, we continued to scale our digital fleet, adding approximately 100 average tractors representing more than 25% sequential growth as compared with the second quarter,” U.S. Xpress CEO Eric Fuller said in a statement. “The digital fleet business model, now branded as Variant, continues to prove out, maintaining a more than 20% advantage in utilization.”
Variant is a digitally recruited, dispatched and managed asset-based fleet that was announced during the second quarter. It had an approximately 70% reduction in driver turnover during the recent quarter and substantially fewer accidents per million miles than the legacy over-the-road fleet.
“This provides real confidence in the scalability of our digital model as we work toward our goal of transitioning an additional 400 underperforming tractors in our legacy OTR solo fleet by the end of the first quarter of 2021 as part of our Phase 1 conversion of 900 tractors,” Fuller said.
He also highlighted that the third-quarter truckload operating ratio improved to 94.6 over the prior year. But the improvement was tempered by a higher percentage of unseated trucks in the legacy over-the-road fleet due to increased competition for drivers and suspension of the student program during the second quarter.
“Looking forward, adjustments we have made over the past two months to our digital fleet recruiting program are beginning to deliver increased hiring momentum through October, contract rates are renewing at higher levels, brokerage margins expanded as we exited the quarter,” Fuller said.
The truckload segment reported revenue increased 2.1% to $347.7 million for the quarter compared with $340.6 million in the 2019 period. Operating income for the segment increased 510.1% to $20.4 million compared with $3.3 million during the prior year.
The brokerage segment report revenue increased 21.6% to $56 million for the quarter compared with $46 million during the prior-year Q3. Operating loss for the segment was $4.5 million during the quarter compared with an operating loss of $63,000 during the previous year.
The company started with 48 trucks when it was founded in 1986. Since then, it has grown to include 7,000 tractors and 15,500 trailers. It also is one of the largest asset-based truckload carriers by revenue in the country.
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