Pam Transportation Services reported late Wednesday a greater than 60% year-over-year (y/y) reduction in operating income on revenue that was down just 13%.
The Tontitown, Arkansas-based truckload carrier saw revenue in its TL unit drop 14% y/y to $146 million although average trucks in service (up 9%), total loads (up 15%) and loaded miles (up 8%) increased. The decline was tied to an 18% decline in revenue per loaded mile (excluding fuel surcharges), which dragged down utilization, or revenue per truck per week, by an analogous percentage.
The rise in trucks in service and loads throughout the period was tied to the acquisition of Metropolitan Trucking last June.
The TL segment posted a 92.7% operating ratio (operating expenses expressed as a percentage of revenue), nearly 1,300 basis points worse y/y.
On a consolidated basis, salaries, wages and advantages increased 500 bps y/y as a percentage of revenue and the “other” expense line, which up to now has included “outside skilled services expenses,” was up 180 bps. Operating expenses for the carrier were higher as a percentage of revenue on every expense line except insurance and claims, which was down 60 bps.
No commentary on the quarter was provided within the news release and the corporate doesn’t hold a public call to debate results.
The falloff in results is emblematic of an industry still trying to find the underside of the cycle. Many carriers have been in a position to ride out the downturn higher than in past freight recessions, partially because of quite a few stimulus payments in addition to a period of over earning throughout the pandemic. Abundant capability and lower volumes have suppressed rates.
Pam’s (NASDAQ: PTSI) logistics unit reported a 9% y/y decline in revenue with a 91.8% operating ratio, 560 bps worse y/y. The corporate doesn’t provide gross profit margins for the unit or any operating metrics like load counts or revenue per load.
Earnings per share of 42 cents for the second quarter were down 66 cents y/y. In comparison with the 2022 second quarter, lower gains on sale were a 3 cent headwind and the next tax rate was a 2 cent headwind. Nevertheless, each of those items were greater than offset by a 13 cent tailwind from a change out there value of the corporate’s equity securities.
Pam generated $69 million in operating money flow within the quarter. Liquidity increased $5 million from the primary quarter to $199 million and debt was reduced $21 million to $230 million.
Shares of PTSI were down 2.3% at 11:16 a.m. Thursday in comparison with the S&P 500, which was down 0.3%.
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