Despite reporting record revenues for the second quarter, Van Buren, AR-based truckload carrier USA Truck has announced its profits have dropped over 27%. The company said this is largely due to idle equipment owing to a lack of drivers and high fuel costs exacerbated by the lower fuel economy of post-'02 engines.
USA Truck said net income declined 27.7% to $1.33 million on 18.7% higher revenues of $85.8 million in the second quarter compared to the same period last year. However, for the first half of 2004, net income increased overall by a whopping 231.5% -- to $2.33 million from $705,000 in 2003 - as revenue went up 19.8% to $165.3 million compared to the first half of 2003.
"While tractor utilization was relatively flat, revenue per mile (before fuel surcharge) grew by 4.9% and we posted our best quarterly empty mile factor (8.0%) since our initial public offering in 1992," said CFO Cliff Beckham.
However, the carrier is finding that a lack of drivers, lower fuel economy and high fuel prices are hurting profitability. "Tractor utilization was constricted by unmanned equipment, which crept up to 5.7% of the fleet in the second quarter versus 3.9% for the same quarter a year ago," he said. "We plan to take a 60-day break from growing our tractor fleet this summer to give our recruiting efforts time to reduce our percentage of unmanned tractors."
Beckham noted that fuel costs hindered earnings again in the second quarter, due both to the price of fuel and reduced fuel economy of the mandated EPA-compliant engines. Other cost items affected the bottom line as well, including higher salaries, wages and employee benefits, depreciation and amortization, plus communications and utilities.