Tennessee-based U.S. Xpress Enterprises Inc. said its 1Q operating revenues and earnings were up for a ninth consecutive quarter.

Revenues increased 6.3% to $234.7 million compared with $220.7 million in the first quarter of 2003. Net income for the first quarter of 2004 was $800,000, or $0.06 per diluted share, compared with net income of $121,000, or $0.01 per share, in the first quarter of 2003.
Consolidated operating income increased 13.4% to $3.6 million in the first quarter compared with $3.2 million in the prior-year period. Truckload segment operating income increased 10.6% to $3.4 million and Xpress Global Systems increased operating income to $230,000 in the first quarter compared with $126,000 in the prior-year period.
Co-chairman Patrick Quinn, said, "First quarter results were up substantially from a year ago on higher operating income from both the truckload and Xpress Global segments. The record 6.0% increase in revenue per mile to $1.35 was a particular highlight for us in what is seasonally our slowest quarter. Additionally, our rate per mile in March was well above the quarter average. We have aggressively pursued rate increases throughout our customer base. In certain cases, we have walked away from under-performing accounts and freight lanes that did not offer the opportunity to achieve adequate financial returns. Heading into the heavier freight volume months, this stronger rate structure should lead to continued improvement in earnings while offsetting the higher operating costs associated with increased driver pay, revenue equipment costs, fuel expenses, insurance and the less efficient EPA-compliant engines.
"The 10.6% improvement in truckload operating income was achieved in the face of significant increases in operating costs," Quinn said. "During the quarter, we implemented a driver pay increase of approximately 8%, along with an increase in owner-operator pay of over 3 cents per mile. Fuel prices increased throughout the quarter, approaching the 2003 first quarter record high prices on average, which along with the less fuel efficient EPA compliant engines negatively impacted fuel expenses. Maintenance expense was reduced as a percentage of revenue as the average age of our tractor fleet declined from 29 months in 2003 to 23 months in 2004. The new hours of service negatively impacted certain customer freight. However, taking into account increases in accessorial charges and the seasonally lower demand experienced in the first quarter, the negative impact of the rules, if any, on the first quarter is believed to be minimal. As we move forward into the period of seasonally heavier freight volumes, we expect to have a better understanding of how these regulations are affecting utilization and operating margins."