Arkansas truck carrier P.A.M. Transportation posted stronger third quarter net income on rising revenue as a diversifying customer base paid dividends.
The Tontitown-based trucking firm recorded quarterly profits of $2.39 million compared to a $880,907 profit one year ago. Revenues climbed to $101.88 million versus $94.55 million in the previous year’s third quarter.
“We are pleased with our recent quarterly performance which affirms some of the strategies we have implemented in order to achieve consistent profitability. Operating income for the third quarter of 2013 increased almost 400% as compared to operating income for the third quarter of 2012. In fact, operating income for each month of the third quarter this year exceeded the entire third quarter 2012 operating income,” said P.A.M. Transportation President Daniel H. Cushman.
“We have stayed on course in terms of our strategic diversity plan as we have continued to diversify our customer base and are constantly in search of opportunities for growth,” he added.
Cushman said the company was pushing for more growth in Mexico, where P.A.M. has made good gains.
“We have stayed on course in terms of our strategic diversity plan as we have continued to diversify our customer base and are constantly in search of opportunities for growth. While we want to achieve overall revenue growth and diversity, we are currently focused on growth in our Mexico Division, Expedited Division, Automotive Division, Dedicated Division and Supply Chain Solutions offering,” Cushman said. “Along with growth in those areas, we are also concentrated on efforts to reduce the portion of our business represented by our random freight offering. Due to the non-repetitive nature of the customers, routes, pickup and transit times, we incur considerably more cost and driver dissatisfaction with this random freight business.”
He said P.A.M. intends to reduce its random freight business division from its current level of 38% of the company’s portfolio of services to roughly 30% going forward.
Cushman also noted that driver recruiting and retention – a major trucking industry challenge due to the retirement of the baby boomer generation – was expected to increase difficulty in operations for the foreseeable future.
“While we are pleased with our overall results to date, the third quarter was not without its challenges, especially in the area of driver recruiting and retention. We anticipate that this challenge is not going to ease anytime in the near future,” Cushman said.
P.A.M. Transportation shares closed trading on Friday at $17.20. The company’s stock has traded between $8.81 and $17.87 per share during the last year.