U.S. Xpress Enterprises on Thursday, April 19, announced operating revenue and earnings for the first quarter ended March 31. Revenue increased 20 percebt to $360.9 million compared with $299.7 million in the first quarter of 2006. The company reported a net loss of $2.6 million for the first quarter compared with net income of $734,000 in the prior-year period.
On Feb. 28, 2006, the company acquired additional equity in both Arnold Transportation and Total Transportation, increasing its ownership interest in each to 80 percent from 49 percent. Accordingly, the financial results of Arnold and Total from Feb. 28, 2006, are included in the company’s consolidated financial statements. Consolidated revenue for the first quarter of 2007 and 2006 includes $86.7 million and $33.0 million, respectively, in revenues of Arnold and Total.
During the first quarter, truckload revenue, excluding the effect of fuel surcharges, increased 22 percent to $295.1 million from $241.3 million a year ago while truckload operations reported an operating loss of $1.2 million, compared with operating income of $4.4 million in the first quarter of 2006.
Revenue of Xpress Global Systems increased 0.5 percent to $22.6 million in the quarter compared with $22.4 million for the prior-year quarter. Xpress Global Systems’ operating income for the first quarter was $1.5 million compared with $369,000 in the prior-year quarter.
“Consistent with the early first-quarter trends we cited in our February conference call and our announcement last week, the truckload operating environment proved to be much more difficult than a year ago,” said Patrick Quinn, co-chairman of Chattanooga, Tenn.-based U.S. Xpress. “Profitable operating results in both our truckload and Xpress Global Systems operating segments in March were not sufficient to overcome the operating losses of our truckload segment in January and February, as the quarter was adversely impacted by lower-than-expected freight demand, severe winter weather in key high-traffic markets that hampered tractor utilization, and rising fuel prices in the second half of the quarter.
“As we have demonstrated the last couple of years, the operating leverage in our business model is substantial,” Quinn said. “Unfortunately, the leverage did not work in our favor this quarter due in part to the difficult truckload environment, as well as the normal seasonality we experience in our business in the first quarter. On a positive note, Xpress Global achieved its fifth consecutive quarter of improved year-over-year quarterly operating income.
“Additionally, we have completed most of our pre-buy of new tractors with 2006 engines,” Quinn said. “Upon completion of the pre-buy, the average age of the company’s over-the-road tractor fleet will be approximately 17 months. As a result, over the next 12 months, we expect to reduce capital expenditures on revenue equipment and utilize our cash flow to reduce our outstanding debt.”
