Truckload carrier Pam Transportation Services announced an operating loss for a second straight period in what it described as an “extremely challenging” first quarter.
Pam (NASDAQ: PTSI) reported net earnings per share of 1 cent compared to 23 cents in the same period a year ago. The result was below a lone analyst’s 7-cent estimate.
Gains generated from equity holdings were $3 million higher year over year (y/y), which produced a 10-cent tailwind to the EPS number. The carrier booked a loss on the sale of equipment versus a $577,000 gain in the 2023 first quarter, which was a 3-cent headwind.
Pam recorded an operating loss of $677,000 in the quarter, which followed an $811,000 operating loss in the fourth quarter.
President Joe Vitiritto said, “shippers’ continued success in leveraging an overcapacity market to their advantage to attain rates at or below cost” was the reason for the poor quarter.
Revenue in the company’s TL segment fell 19% y/y as loaded miles dropped 14% and revenue per loaded mile was off 5%. The company operated 7% fewer tractors in the quarter, with revenue per truck per week declining 9%.
Loaded miles were up 5% from the fourth quarter, which was impacted by an auto strike, but revenue per loaded mile was down 6% sequentially.
The TL unit reported a 104.2% operating ratio (operating expenses expressed as a percentage of revenue), 490 basis points worse y/y.
Table: Pam’s key performance indicators
Consolidated expenses were down 14% y/y but revenue dropped 18%. Salaries, wages and benefits expense increased 240 bps as a percentage of revenue while depreciation expense was 290 bps higher. Those increases were partially offset by a 430-bp reduction in insurance and claims expense.
“This market backdrop coupled with weather disruptions early in the quarter which drove cost increases and reductions in equipment utilization created a tough environment to get traction in efforts to improve earnings,” Vitiritto said.
The company’s logistics segment reported a 14% y/y decline in revenue to $59 million. It doesn’t provide gross profit margins for the unit or operating metrics like load counts and revenue per load. The unit posted a 93.9% OR, 510 bps worse y/y but 40 bps better sequentially.
The poor first-quarter report follows other dire updates from carriers this week. J.B. Hunt Transport Services (NASDAQ: JBHT) reported a big earnings miss on Tuesday, and Knight-Swift Transportation (NYSE: KNX) cut its first-half outlook by more than half on Wednesday.
“We continue to intensely focus on cost reduction, opportunities to gain efficiency and market positioning to maximize the benefit of an improving freight environment when that occurs,” Vitiritto said.
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