Tontitown-based P.A.M. Transportation Services is off to a record start in 2015 reporting net profits of $5.369 million, rallying 296% from the $1.356 million net income reported in the first quarter of 2014.
On Wednesday (April 22) the carrier posted earnings per share of 72 cents for the quarter ending March 30, 2015, well ahead of the 17 cents per share earned a year ago.
Total revenue rose to $99.483 million, up 1.7% from the $97.82 million reported a year ago. Lower fuel costs helped to hold down revenue growth in the quarter. Without fuel operating revenues rose 10.4% from the prior-year period.
"Obviously, we are thrilled with our first quarter results. Our operating income of $9.1 million is the most profitable quarter on record and certainly a significant improvement over last year's $2.8 million operating income,” CEO Daniel Cushman noted in the release made Wednesday after the market closed.
He said January is typically one of the company’s less profitable months, but this year that was not the case.
“We had great miles, and weather was not as much of an issue as it was during last year's January. Due to the nature of our customer mix, we will continue to be impacted by scheduled plant shutdowns, but the diversification achieved over recent years has given us better freight substitution capability. Similar to last year, February weather presented challenges but not to the level seen in the previous year. March, which is typically one of our stronger months, continued to be so,” Cushman said.
The dry van load carrier announced plans in January to continue its growth strategies despite tight driver capacity which it expects to worsen. Cushman said lower fuel costs pressured overall rates from a year ago. That said, the company has been able to secure certain rate increases, and its overall miles per truck per week increased, though not as much as expected.
In an effort to diversify, P.A.M continues to focus on its logistics brokerage business. Cushman said the division performed well in the first quarter, nearly doubling its revenue year-over-year. Revenue for the logistics segment totaled $10.155 million in the quarter compared to $5.448 million a year ago.
"We continue to make investments at every level in our driving professionals. We have further invested in our driver partner schools supporting them in their growth and expansion. We are consistently reviewing and updating driver pay on a lane-by-lane basis and have seen positive results in our driver retention. Our overall package offering of new equipment, consistent driver-friendly lanes, increasing pay packages, and frequent home time opportunities has helped us reduce driver turnover,” he said in the report.
A driver shortage of between 35,000 to 40,000 drivers is getting more pervasive in the truckload sector, according to Bob Costello, chief economist with the American Trucking Associations’. He said growing freight volumes, regulatory pressures and normal attrition, the industry expects the problem to get worse in the near term as the industry works to find solutions to the shortage.
The $310 billion a year truckload sector moves the vast majority of freight in this country, and ATA President Bill Graves said the shortage of drivers in that sector is impeding sufficient growth among carriers in that segment.
“The truckload sector is adding little if any capacity,” Graves said. “LTL (less-than-truckload) is adding a small amount but remains well below all-time highs. LTL moves less than 10% of tonnage in this country, however.”
P.A.M. Transport Services operated 1,430 company-owned trucks in the quarter, down from 1,459 trucks a year ago. The company also employed 362 owner/operators in the first quarter, up from 352 hired in the first quarter of 2014.
P.A.M. drivers carried a total of 72,136 loads in the quarter up 7.28% from a year ago.
Revenue per truck averaged $3,210 per week in the first quarter of 2015, up from $3,040 a year ago.
The share price of P.A.M. (NASDAQ: PTSI) closed Wednesday at $63.68, down 48 cents. The thinly held company did not trade after hours following the earnings release. The share price is up 22% this year, setting a 52-week high at $64.80 on Wednesday, early in the day. The stock’s low price over the past 52 weeks is $21.22.