Tontitown-based P.A.M. Transportation Services Inc. saw its share price jump 20 percent in trading Wednesday after releasing second-quarter earnings that showed profits closer to the boom times of 2015.
The trucking company reported net income of $7.3 million for the quarter ending June 30 compared with $1.6 million for the same period a year before. Earnings per share were $1.17 for the quarter compared with 25 cents for the same quarter in 2017.
Total revenue for the period, including fuel surcharges, stood at $135.3 million, a record, up from $108.6 million in the second quarter last year.
Wall Street took the report well. Shares closed at $52.95 Wednesday, up $8.84, or 20 percent, in trading on the Nasdaq. Shares have traded as low as $16.34 and as high as $57.25 over the past year.
"We have a lot to be happy and proud about when looking at our second quarter results," Daniel Cushman, president of P.A.M., said in a statement.
He noted that while results were particularly impressive when compared with last year, 2017 overall was a lackluster year and is not a benchmark the company should be using to measure success.
"We aspire to get back to the earnings level of 2015, which was a record earnings year for the Company," he said.
Cushman said the company nearly matched its 2015 second quarter but didn't have the benefit of nearly $1.6 million gained from selling used equipment. He said that going forward, P.A.M. will continue to benefit from better rates as the company continues to negotiate better deals with its customers.
On Wednesday, the American Trucking Associations said its seasonally adjusted For-Hire Truck Tonnage Index for June stood at 113, up 7.8 percent from June of last year. When looking at the first half of 2018 compared with the same period in 2017, the index shows a tonnage increase of 7.9 percent.
"In the second quarter, we saw the tonnage index jump 1.8 percent from the previous quarter and 8.4 percent for a year earlier," Bob Costello, American Trucking Associations chief economist, said in a statement. "This robust growth fits with what is likely to be a very strong GDP reading for the second quarter. I expect the growth in tonnage to moderate, but remain at very high levels in the months ahead."
P.A.M.'s Cushman said driver recruitment and retention will continue to be a drag on earnings, noting the company instituted a "significant" driver pay increase in 2017 and that he anticipated it being an ongoing challenge moving forward.
According to Costello, the driver turnover rate in the first quarter of 2018 was up 6 percentage points to 94 percent in fleets with more than $30 million in annual revenue. The turnover rate is 20 percentage points higher than in the first quarter of 2017. Turnover is not a measure of driver shortage but a measure of demand for drivers.
"Anecdotally, carriers continue to struggle both recruiting and retaining drivers," Costello said in a June release. "The tight driver market should continue and will be a source of concern for carriers in the months ahead."
For the quarter, P.A.M.'s total miles stood at 57.18 million compared with 58.72 million for the second quarter of 2017. Revenue per total mile before fuel surcharges for the quarter was $1.56 compared with $1.39 in the same period a year before. Revenue per truck per week was $3,716, up from $3,370 last year.
Business on 07/26/2018