P.A.M. Transportation Services Inc. booked net income of $1.39 million for its first quarter, down from $2.28 million for the same quarter a year ago, primarily because of winter weather and a wage increase for drivers, the company reported Monday.
The Tontitown-based trucking company said earnings per share stood at 22 cents for the quarter ended March 31, compared with 36 cents per share for the first quarter of 2017.
Total revenue, including fuel surcharges, was $119.5 million for the quarter, up 9 percent when compared with $109.4 million for the same period a year ago.
Wall Street reacted positively to the trucking company's results. Shares closed at $35.99 in trading Monday on the Nasdaq, up 99 cents or nearly 3 percent. P.A.M.'s shares have traded as low as $15.72 and as high as $43.20 over the past year.
In a statement, President and Chief Executive Officer Dan Cushman said he was pleased overall with the results and the company is in a good position to meet its goals of record earnings. He said the pay raise to company drivers was 13 percent on average.
"These company driver pay raises were followed shortly thereafter by an increase in rates paid to certain owner operators within our network," Cushman said in a release. "These raises were long overdue and we believe they are necessary to experience the level of growth we anticipate for the year."
The company's operating ratio for truckload operations for the quarter was 96.4, down from 97.2 for the 2017 quarter. The ratio is a reflection of the trucker's efficiency, with a smaller ratio indicating the company's greater ability to be profitable.
Revenue per total mile, before fuel surcharges, was $1.45 for the period, up seven cents from $1.38 last year. The average number of company driver trucks was 1,233 for the quarter, down from 1,281. The average number of owner operator trucks was 550, down from 631 for the year ago period.
Cushman said while the company had faced "significant headwinds" in the first quarter the freight market is strong and gave P.A.M. long overdue opportunities to secure rate increases after two years of stagnant or lower rates mixed with increasing costs.
He noted 55 percent of the company's contracts are a mix of automotive manufacturers and their suppliers with existing contracts that didn't allow for price increases in general.
"As of the end of this year's first quarter, we have only addressed rate increases on approximately 45 percent our our business and will address the remainder as contractual commitments allow. We are excited about the prospect of the rate increases on the remaining 55 percent of our business and the resulting positive impact we expect to see in our operating results."
Business on 05/01/2018