P.A.M. revenue rises, earnings fall in fourth quarter

Tontitown-based carrier P.A.M. Transportation Services Inc. posted a double-digit revenue rise and earnings decline in the fourth quarter amid softer-than-expected freight demand. Still, 2022 earnings and revenue were up compared to 2021.

After the markets closed Monday (Feb. 13), P.A.M. reported that earnings fell by 35.5% to $17.98 million, or 81 cents per share, in the fourth quarter from $27.89 million, or $1.24 per share, in the same period last year. Revenue rose by 11% to $237.61 million from $213.91 million.

According to a news release, earnings were affected negatively because of a loss for a claim that’s expected to settle for an amount exceeding the company’s insurance policy limits. Excluding this, fourth-quarter earnings would be $24 million, or $1.08 per share.

For 2022, earnings increased by 18.5% to $90.67 million, or $4.04 per share, from $76.51 million, or $3.35 per share. Revenue rose by 33.9% to $946.86 million from $707.12 million.

“I am proud of our team’s results and how we navigated 2022’s challenges,” President Joe Vitiritto said. “Our driving associates have my utmost respect and admiration. Without them, we couldn’t have achieved these results. We did not see a traditional peak in the fourth quarter as we anticipated, but our entire team stepped up to the challenge and navigated a challenging environment well. We continue to remain focused on continually improving and delivering value to our customers, our team members and our shareholders in 2023.”

Following are some highlights in the earnings report:

• Logistics operations revenue rose by 5.2% to $67.17 million in the fourth quarter from $63.86 million in the same period in 2021. For 2022, the revenue rose by 31.2% to $277.81 million from $211.67 million in 2021.
• Fleet size increased nearly 28% to almost 2,500 trucks, including 17% growth from the June acquisition of Metropolitan Trucking Inc.
• Fleet repair and maintenance costs rose slightly as the carrier held onto its equipment longer amid fleet growth challenges.

Shares of P.A.M. (NASDAQ: PTSI) closed Monday at $27.93. The stock was trading mid-morning Tuesday (Feb. 14) at $27.19, down 74 cents or 2.65%. In the past 52 weeks, the stock has ranged between $23.52 and $39.80.

BROADER TRENDS
According to the Cass Freight Index Report, January shipments rose by 4.3% from the same month in 2022. However, January shipments declined by 3.2% from December.

The report shows that freight spending declined by 2.5% in January from the same month in 2022. January spending was flat from December.

January shipments were better than expected and benefited from mild weather and rising vehicle production. The COVID-19 omicron wave was underway in January 2022 and contributed to “widespread absenteeism and supply-side pressure on shipments, and weather was more severe last January,” the report shows. Because of this, the year-over-year “comparison isn’t too meaningful.”

If shipments follow normal seasonal patterns, they’re projected to be flat in February and March from the same months in 2022. According to the report, “the outlook remains cautious, but volumes are on a high plateau” after a soft holiday season in which inventories were overstocked and imports declined.

The report noted “a considerable increase in the proportion of truckload (TL) freight over the past several months, suggesting freight is migrating to TL from other modes. This fits with the robust growth in truckload capacity metrics. The resilience of volumes thus partly reflects share gains by the truckload sector, particularly contract and dedicated freight currently, amid declines in less-than-truckload (LTL) and intermodal volumes.”