USA Truck swings to profit on fuel contract sale
by July 22, 2010 11:00 am 69 views
Van Buren-based USA Truck ended a string of quarterly losses with a $900,000 net income gain in the second quarter, but company officials say tough economic conditions will continue for the near term.
The long-haul carrier posted a first quarter loss of $2.99 million. That loss followed a 2009 net income loss of $7.17 million compared to a gain of $3.14 million in 2008. The 2009 loss included a second quarter loss of $1.1 million.
USA Truck’s per share earnings of 9 cents beat the consensus of analyst estimates which predicted 0 cents per share.
The gains were primarily courtesy of the company selling a fuel hedge contract that generated a $1.2 million reduction in fuel expenses during the quarter.
From a revenue standpoint, 2010 is looking better for USA Truck. Total revenue for the first six months of 2010 is $213.306 million, up 17.9% compared to the same period in 2009. However, the company has lost $2.096 million in the first half — a number made easier to swallow when compared to a $3.028 million loss for the same period of 2009.
“We made solid year-over-year progress this quarter and dramatically improved our performance sequentially from the first quarter this year. Through disciplined execution of our long-term strategic plan, VEVA (Vision for Economic Value Added), and aided by an improving operating environment and the sale of a fuel contract, we achieved our near-term goal of returning to profitability by the second quarter 2010,” Clifton Beckham, USA Truck president and CEO, said in the earnings statement.
Beckham said the miles-per-truck per week continues to be below expectations, with the unmanned tractor percentage (6.5%) caused by a “tighter market for hiring qualified drivers.”
Beckham noted: "While our Trucking base revenue per mile has steadily improved over the past few years, we are still below the targets we have established for our freight network. Several years of declining industry freight prices have taken their toll. We do not believe we are being adequately compensated for our services, particularly in the face of higher operating costs (tractor and trailer prices, toll charges, taxes, health insurance, etc.).”
The company predicts continued tight capacity (too few trucks and trailers to meet the freight demand) will continue because of too few drivers and businesses needed to restock inventories.
Talk of potentially improving conditions from USA Truck execs mirrors that of the execs at Fort Smith-based Arkansas Best Corp. The less-than-truckload company reported Wednesday (July 21) a net income loss of $7.4 million for the second quarter of 2010.
The second quarter earnings reflected a net loss of 30 cents per share, which beat the consensus of analyst estimates by 9 cents. Also, total revenue during the quarter was $411.3 million, up 13.4% compared to the same quarter of 2009.
USA Truck shares (NASDAQ: USAK) were up in more than 3% in morning trading, reaching above $15.35. During the past 52 weeks, the share price has ranged from a $18.79 high to a $10.78 low.