P.A.M. Transportation Services' third-quarter financial results beat an analyst's projections, but the company is still working through disruptions in the automotive industry and an overall struggle to retain truck drivers.
In the three-month period ended Sept. 30, P.A.M.'s revenue totaled about $108.8 million. In the third quarter of last year, the Tontitown-based company generated about $109 million in revenue.
An analyst tracking the company predicted P.A.M. would report about $92.5 million in revenue, with earnings per share of about 26 cents.
Revenue including a fuel surcharge fell almost half a million dollars from the same quarter a year ago, and expenses continued their year-over-year climb, this year by almost $1 million. Last year, the company said it could not raise prices high enough to overcome rising operating expenses.
Now, with freight markets tightening, the company said it has more leverage to raise its rates. In a prepared statement included in the earnings results, Daniel Cushman, company president, said P.A.M. has made "significant progress" in charging its customers more per mile.
"We are continuously challenged to find innovative solutions which provide an advantage in this area," Cushman said.
Driver recruitment and retention remain challenges for the company. Werner Enterprises and J.B. Hunt Transportation Services, both larger than P.A.M., said they, too, will raise rates in the near term and hope to increase driver pay.
Spending on salaries and benefits in the third quarter fell to $24.7 million from $28.1 million in third-quarter 2016, when year-over-year costs in this category spiked.
Cushman said the quarter was "unexpectedly difficult" because automakers shut down production lines longer than normal.
"This resulted in equipment productivity losses as we scrambled to find acceptable short-term freight moves that would keep our trucks productive," Cushman said.
P.A.M. executives in 2016 decided to expand the company's fleet of trucks, which they said paid off with a 6.3 percent increase in trucking revenue compared to the third quarter of 2015, when P.A.M. had an average of 1,832 trucks in its fleet. In the third quarter of 2016, there were 1,882 trucks on average. The fleet fell by 74 trucks in the third quarter of 2017.
While its revenue per truck slid by about $40 per week in the third quarter, P.A.M. carried more loads over fewer miles. The company hauled 84,611 loads over 56.4 million miles in the third quarter, compared to 81,006 loads over 60.7 million miles in the quarter a year ago.
Business on 10/25/2017
Print Headline: P.A.M. targets rates, driver retention