Truckload carrier Marten Transport saw its fourth-quarter net income decline by greater than half from the corresponding quarter of 2022. The financial report reflected about what one would expect from a truckload carrier in the course of a freight recession.
Revenue was down across the board at the corporate. At Marten’s Truckload division, operating revenue dropped 13.6%. In its Dedicated operations, the slide was 17.5%. Intermodal suffered a 35.7% decrease in operating revenue.
And although expenses were down 12.8%, it wasn’t enough to stop net income at Marten from declining to a per-share variety of 15 cents from 31 cents a yr ago.
In the corporate’s prepared statement accompanying its earnings — Marten (NASDAQ: MRTN) doesn’t do an earnings call with analysts — Executive Chairman Randolph Marten suggested that the corporate felt strong enough in regards to the market going forward to carry the road on prices.
“We remain focused on each minimizing the freight market’s impact on our operations, and investing in and positioning our operations to capitalize on profitable organic growth opportunities because the market moves toward equilibrium from its current recessionary late stages — with fair compensation for our premium services,” Marten said within the statement. “Accordingly, we now have not agreed to any rate reductions since last August.”
The expense picture at Marten, though down overall, had a couple of negatives that were enough for Randolph Marten to point them out in his statement.
The insurance and claims line within the earnings statement rose to $15.2 million from $12.4 million a yr earlier. “Our higher insurance and claims and medical insurance expense and fewer revenue equipment gains reduced our operating income by $4.8 million, or 4.4 cents per diluted share, from this yr’s third quarter,” Marten said.
The corporate’s earnings together with its note about higher insurance costs comes a day after Knight-Swift also cited insurance as a key think about its fiscal performance, which recorded a net loss. Nonetheless, the Knight-Swift insurance woes were in an insurance business the corporate is within the means of exiting.
Other expenses were held in check. Salaries and wages were $91.3 million, down from $104.7 million a yr ago. Purchased transportation fell to $47.3 million from $60.6 million.
On a broader freight market basis, Marten said of the conditions facing the corporate: “This quarter’s earnings were heavily pressured by the freight market recession’s weak demand and oversupply, inflationary operating costs, and cumulative impact of decreased freight rates resulting in freight network disruptions.”
Operating ratios throughout the corporate reflected the weak market. The OR in Truckload net of fuel deteriorated to 97.4% from 87.6%. For Dedicated, the slide was less dramatic, weakening to 88.1% from 85.4%. Intermodal dropped to 98.1% from 96.8%; brokerage got here in at 91% after being at 88.5% a yr ago.
Sequentially, Marten mostly was weaker but not dramatically. The OR for Truckload within the third quarter was 97.2%, barely higher than the fourth quarter. Dedicated’s drop to 88.1% got here from a third-quarter variety of 86.4%. Intermodal did significantly higher, moving into the black at 98.1% after being at 105.9% within the third quarter. Brokerage’s 91% performance was down from 89.7%.
Overall, Marten had an OR of 93.2%, in comparison with 87.8% a yr earlier. 1 / 4 earlier, the consolidated OR was 92.8%.
Marten’s stock performance is just not showing a transparent trend. Up to now month, it’s down about 2.9%. For the 52 weeks, it’s a decline of about 8%. But for the past three months, Marten stock is up about 13.1%.
In accordance with SeekingAlpha, the 15-cents-per-share net income figure for the corporate was off projections by 3 cents. Revenue of $268.22 million fell in need of consensus projections by $3.4 million.
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