Two large trucking fleets reported big increases in profits for the third quarter of the year, and a fleet management and related services conglomerate also saw a hike. But things slipped for a niche trucking provider.
Werner Grows Fleet, Profits
Nebraska-based Werner Enterprises Inc. (WERN) reported a 24% increase in its third quarter net income from a year earlier, totaling $32.1 million as earnings per diluted share moved higher from 36 cent to 44 cents.
Total revenue increased 3% to $534.4 million. Trucking revenue excluding fuel surcharge moved 8% higher to $360.1 million.
Operating income improved 27% to $52.8 million.
“Freight demand in third quarter 2015 and so far in October 2015 has been similar to historical standards and not as strong as the robust freight market during the same periods in 2014,” Werner said in a statement. “Constrained truck capacity combined with a gradually improving economy in the retail, consumer products and grocery products markets primarily served by us are contributing to freight demand trends.”
Werner said it ended the third quarter with 7,415 trucks in its truckload segment, 140 more than at the end of second quarter and 355 more than a year ago. Its specialized services unit, primarily dedicated, ended the quarter with 3,710 trucks, or 50% of its total truckload fleet.
“We are making continued progress implementing sustainable rate increases with our customers,” Werner said. “These efforts are ongoing as we move forward and work to recoup the cost increases associated with more expensive equipment, a shrinking supply of qualified drivers and an increasingly challenging regulatory environment.”
More financial details are on the Werner Enterprises website.
Profit Increases Nearly 21% for Knight
Knight Transportation Inc. (KNX) also saw a big gain in its net earnings, with a big hike in revenue.
The Arizona-based fleet saw net income increase 20.6% in the third quarter from the same time in 2014, totaling $30.3 million, as earnings per diluted share increased from 31 cents to 37 cents.
Total revenue improved 10.5% to $300.1 million. Revenue minus fuel surcharges gained 18.5% to $269.9 million.
Operating income showed a 16.7% improvement totaling $46.4 million.
President and CEO Dave Jackson said the pick-up in the company’s consolidated revenue (excluding fuel surcharge) and operating income came “despite a lukewarm freight environment.”
“Both our trucking and logistics segments continue to contribute to our growth as we continue to enhance our logistics capabilities to meet the supply chain needs of our customers,” he said.
In the third quarter, Knight's trucking segment experienced revenue growth excluding fuel surcharge of 21.6% while improving operating income by 20.3%.
Revenue per tractor excluding fuel surcharge increased 1.8% year-over-year due to a 4.6% improvement in revenue per loaded mile and a 2.6% increase in length of haul. That was offset by a 0.2% decrease in average miles per tractor and an increase in non-paid empty mile percentage, according to Knight, along with increased salaries and wages, increased driver recruiting and hiring costs and rising equipment prices.
In Knight’s brokerage business, which is the largest component of its logistics segment, it reported load volume grew by 64.8%. However, due to lower fuel surcharge and a shorter length of haul, revenue increased year over year by 11.7% while operating income improved by 8.8%.
Revenue in Knight's intermodal business rose year-over-year by 3.6%, while operating income improved 20.5% when compared to the same quarter last year.
There is more information on the Knight Transportation website.
Ryder Sees Profit Move 8% Higher
The leasing, fleet management, dedicated transportation, and supply chain services provider Ryder Corp. (R) saw third quarter net earnings of $90.8 million, an 8% improvement from a year earlier, as diluted earnings per share totaled $1.70, up from $1.58.
Total revenue fell just 1% to $1.669 billion as higher operating revenue was offset by lower fuel prices passed through to customers.
The Florida-based business also said third quarter operating revenue and revenue excluding all fuel and subcontracted transportation, which reflected higher full service lease and commercial rental revenue in Fleet Management Solutions (FMS), new business and increased volumes in Dedicated Transportation Solutions (DTS) and Supply Chain Solutions (SCS) was partially offset by negative affects from foreign exchange rates.
Ryder Chairman and CEO Robert Sanchez said the third quarter saw strong growth in operating revenue and solid year-over-year earnings improvement, despite "growth-related maintenance challenges and less robust used vehicle sales conditions.”
The company has made adjustments to add labor capacity within its maintenance organization, and based on the progress he said the company has made, “we’re confident this growth-related challenge will be fully resolved by the end of October.”
In Ryder’s FMS business, operating revenue excluding fuel in the third quarter of 2015 was $988.4 million, up 6% compared with the year-earlier period. Total revenue in the third quarter of 2015 was $1.2 billion, down 2%.
Full service lease revenue increased 6% due to fleet growth and higher prices on replacement vehicles, according to Ryder. The number of full service lease vehicles, excluding U.K. trailers, increased by 7,400 from the year-earlier period and grew by 1,900 vehicles sequentially from the second quarter of 2015.
Commercial rental revenue grew 7%, reflecting increased demand and higher pricing in North America. Fuel services revenue decreased 34%, primarily reflecting lower fuel prices passed through to customers.
In the DTS business segment, third quarter 2015 operating revenue (revenue excluding fuel and subcontracted transportation) was $184.2 million, up 9% compared with the year-earlier period. DTS operating revenue grew as a result of new business, as well as higher volumes and pricing, according to Ryder. Total revenue in the third quarter of 2015 was $226.9 million, consistent with the year-earlier period, as increased operating revenue was offset by lower fuel costs passed through to customers.
In Ryder’s SCS business segment, third quarter 2015 operating revenue was $318.8 million, up 5% compared with the year-earlier period.
SCS operating revenue grew as a result of new business, higher pricing, and increased volumes the company said. Total revenue was down 1% to $387.3 million, compared with $390.2 million the same quarter a year ago, as increased operating revenue was more than offset by lower purchased transportation costs and lower fuel costs passed through to customers.
You will find more details on the Ryder website.
Forward Air Profit Slips Due to Integration Costs
Forward Air Corp., a time-definite transportation and logistics provider in the ground expedite freight market, saw its profit slip to $15.7 million in the third quarter from $16.7 million a year earlier.
Net income per diluted share for the third quarter of 2015 was $0.50 compared to $0.54 in the prior-year quarter for the Tennessee-based operation.
This happened as revenue increased 22.6% to $247.1 while operating income fell from $26.9 million a year earlier to $24.6 million in the third quarter of this year.
There are approximately $3.9 million in Towne Air related integration costs included in the third quarter 2015 results, Forward Air noted, referring to its purchase completed earlier this year. “Excluding these costs, our adjusted income from operations would have been $28.5 million, compared with $26.7 million in the prior-year quarter, adjusted net income for the period would have been $18.1 million compared to $16.7 million in the prior year quarter and our adjusted income per diluted share would have been 58 cents compared to 54 cents a year ago.”
According to Forward Air, there are approximately $22.9 million in Towne Air related deal and integration costs included in its financial results for the first nine months of the year.
“Excluding these costs, our adjusted income from operations was $75.6 million compared with $71.5 million for the same period of 2014, adjusted net income for the period was $46.3 million compared to $44.7 million in 2014, and adjusted income per diluted share was $1.49 compared to $1.43 a year ago,” the company said.
There are more details on the Forward Air website.