Bulk and chemical logistics provider Quality Distribution Inc. has reported a 9.7% increase in revenue in the third quarter of the year compared to a year ago while earning increased by an even wider margin.
The Florida-based operation had net income of $3.6 million, or 13 cents per diluted share, for the third quarter of 2014, compared to net income of $2.8 million, or 10 cents per diluted share, for the third quarter of 2013.
"We are pleased with our third quarter results and in particular, the revenue growth in our largest business, chemical, at nearly 11%, and just over 15% revenue growth in our intermodal business," said Gary Enzor, chairman and CEO. "Our chemical business is growing nicely through the expansion of our national footprint, and our intermodal business continues to deliver steady and profitable growth. Our energy logistics revenue was relatively flat from last year, yet achieved modest year-over-year margin improvement this quarter.”
He said helping the financial improvements helped improve the company’s driver count, up 7.1% since the end of last year.
"Historically, driver turnover increases in the fourth quarter due to expected seasonal declines in volumes, and extra efforts are being made to retain drivers through this slower period. The new chemical terminals opened this year should contribute to revenue growth in the fourth quarter this year, compared to last year,” said Enzor. “We expect our intermodal business to deliver solid profitability in the fourth quarter as well. We are cautious about our outlook for the energy business for the remainder of the year. While there have been rapid declines in energy prices, we have not yet seen a material decline in our hauling activity."
Revenue in Quality Distribution’s chemical logistics segment was $174.2 million in the third quarter of 2014, up 10.9% versus the third quarter of 2013. Excluding fuel surcharges, revenue increased 10.8%, resulting from higher volumes and solid price increases, benefits from a business acquired by an independent affiliate earlier this year, and the opening of several new terminal locations in 2014, according to the company. Operating income was $19.1 million in the third quarter of 2014, which was relatively flat from the prior-year period.
Third quarter 2014 revenue in the intermodal segment was $40.6 million, up 15.1% versus the prior-year period. Excluding fuel surcharges, revenues for the third quarter increased 14.6%. Strong international customer demand drove higher shipments, particularly import volumes, which in turn led to increases in both transportation and depot services revenue, Quality Distribution said. Operating income was $7 million in the third quarter of 2014, a more than 50% increase over the third quarter of 2013.
Revenue in the energy logistics segment was $43.2 million during the third quarter of 2014, which was flat versus the comparable prior-year period. Excluding fuel surcharges, revenue was down 2.4% versus last year as stronger volumes in two shale regions were primarily offset by lower disposal water related activity in another region, according to the company. The energy logistics segment reported an operating loss of $1.1 million in the third quarter of 2014, compared to an operating loss of $1.8 million in the prior-year period.
For the fourth quarter of 2014, Quality expects adjusted earnings per diluted share to be in the range of 14 cents to 18 cents. For the full year of 2014, the company expects adjusted earnings per diluted share to be in the range of 72 cents to 76 cents.
Quality Distribution operates one of the largest chemical bulk logistics networks in North America through its subsidiary Quality Carriers Inc., and is one the largest North American providers of intermodal tank container and depot services through its Boasso America Corp. Quality also provides logistics and transportation services to the unconventional oil and gas industry including crude oil, fresh water and production fluids, through its operations QC Energy Resources Inc. and QC Environmental Services Inc.
More details are on the Quality Distribution website.