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Earnings Watch: Patriot Profit Higher, Others Mixed

Third-quarter financial reports from fleets and equipment makers continue to reflect a tepid freight environment.

Evan Lockridge
Evan LockridgeFormer Business Contributing Editor
November 17, 2016
Earnings Watch: Patriot Profit Higher, Others Mixed

 

5 min to read


Third-quarter financial reports from fleets and equipment makers continue to reflect a tepid freight environment.

Patriot Transportation Holding Inc. (NASDAQ:PATI) reported net income of $2.1 million, or 63 cents per share, compared to net income of $1.6 million, or 48 cents per share, in the same quarter last year. This was helped by 24 cents per share due to the gain on the sale of an easement to the state of Florida where the company is based.

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Total revenue for the quarter was $30.4 million, up slightly from $30.3 million a year earlier. Transportation revenues, which exclude fuel surcharge, increased $582,000 to $28.9 million as fuel surcharge revenues were down $520,000 to $1.5 million. 

As a result of improved pricing and better utilization of equipment, Patriot’s transportation revenue per mile increased by 4.2% over the same quarter last year, according to the company.

Patriot also reported the end of its 2016 fiscal year with net income of $5.7 million, or $1.74 per share, compared to net income of $3.4 million, or $1.02 per share, in 2015. Total revenues were $120.1 million, down from $122.9 million in fiscal 2015.

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“We were successful this year in growing our per mile transportation revenue by 4.7% over last fiscal year,” the company said in a statement. “We continue to focus on the difficult challenge of hiring and retaining qualified drivers. Our strategy going forward is to concentrate our growth efforts in the markets where we have been successful finding those drivers.”

Radiant Logistics Sees Small Profit Following Losses

Radiant Logistics Inc. (NYSE: RLGT) moved to a profit of $1.4 million, or 3 cents per share. This compares to a net loss of $200,000 a year earlier and marked the first time it was in the black after four straight quarterly losses.

Revenue totaled $195.1 million, down 9.5% from the same time in 2015 for the Washington-state-based company, which operates On Time Express among its third-party logistics and multi-modal services.

“In our opinion, it is just a matter of time before capacity tightens and the U.S. brokerage market returns to more normalized levels, which should improve our overall results,” said Bohn Crain, founder and CEO. “In the meantime we continue to focus on the continuous improvement of our existing business through our ongoing investment in technology and our cross sale initiatives between our forwarding and brokerage operations.”

Expeditors International Profit Slips

Expeditors International of Washington Inc. (NASDAQ:EXPD) reported its net income dropped 9% from a year earlier to $107.6 million in the third quarter of 2016. Earnings per share dipped to 59 cents from 62 cents.

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Total revenue for the logistics provider during the quarter was lower by 5%, totaling $1.56 billion. Operating income decreased 13% to $167 million.

“We grew our business even as rates were adjusting to a very fluid marketplace and pressuring margins beyond what we would normally expect,” said Jeffrey S. Musser, president and CEO. “Typically, as in the most recent quarter, rates compress when volumes increase. In the year-ago third quarter, however, we grew volumes at the same time that our airfreight net revenue per ton was the highest in the company’s history. By comparison, in this most recent quarter of modest marketplace growth in volumes and a further slowdown in global trade, we shipped record volumes in both air and ocean.”

Cummins Earnings Fall

On the equipment side of trucking there were also some third quarter earnings reports, including from the nation’s only independent truck engine maker.

Cummins Inc. (NYSE: CMI) reported its revenue of $4.2 billion decreased 9% from the same quarter in 2015.

Lower truck production in North America and weak international demand for power generation equipment were the most significant drivers of the decline in sales, according to the company.  

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Revenue in North America fell 13% while international sales dropped by 3%. In international markets, higher revenues in China partially offset declines in the Middle East and Africa.

Net income was $289 million, or $1.72 per share, compared to net income of $380 million or $2.14 per share a year earlier.  

“Due to the slow pace of growth in the global economy, we continue to face weak demand in a number of our most important markets,” said Cummins Chairman and CEO Tom Linebarger. “The restructuring actions that we initiated in the fourth quarter of 2015, combined with strong execution on material cost reduction initiatives, productivity gains and improvements in product quality, are all helping to mitigate the impact of weaker revenues.”

Cummins expects full year 2016 revenue to be down 9%, consistent with its prior guidance of down between 8% and 10%.

Westport Losses Grow Despite More Revenue Following Merger

Westport Fuel Systems Inc. (NASDAQ:WPRT) had much higher revenue but it was not enough to keep it from reporting a loss.

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The Canadian company saw revenue jump to $76.1 million compared to $22.3 million a year earlier, due in large part to Westport Innovations merging with Fuel Systems Solutions in June, creating the current company name. All figures are in U.S. dollars.

This helped cut its net loss to $33.3 million, or 30 cents per share, from $37.4 million, or 58 cents per share in the third quarter of 2015.

“We have sold non-core assets and improved our working capital position through inventory reduction efforts this quarter,” said Ashoka Achuthan, chief financial officer. “To strengthen our liquidity position, divestiture decisions have been made and we are continuing to align costs with revenue. We have engaged advisors to address debt financing alternatives so that we can continue pursuing our longer term strategies for growth and technical leadership.”

Westport’s joint venture with Cummins, Cummins Westport Inc. reported revenue of $67.5 million on 1,643 units for the quarter, a decrease of 18.1% in revenue over the same period last year. The company said this was due to continued market headwinds and an overall industry decline in truck volumes, though it was partially offset by higher shipments in the transit market.

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