P.A.M. Transportation Services Inc. of Tontitown on Monday reported first-quarter net income of $1.4 million, or 22 cents per share, down from $2.3 million, or 36 cents per share, in the same quarter last year.
The publicly traded truckload dry van carrier (Nasdaq: PTSI) reported operating revenue, before fuel surcharge revenue, $99.1 million, up about 6 percent from the same quarter last year. Fuel surcharge revenue was $20.3 million, up about 29 percent from the same quarter last year “as fuel prices were significantly higher year over year,” the company said in a news release.
“While we did experience significant headwinds during this first quarter, the freight market was very strong and provided long overdue opportunities to secure customer rate increases,” President Daniel H. Cushman said in a news release. “Over most of the last two years, the freight market had become very stagnant and many customers pushed rates lower at the same time many of our costs were rising. A favorable shift in freight demand began during the fourth quarter of 2017 and has strengthened throughout the first quarter of 2018.”
Cushman said first-quarter operating results “improved considerably” compared to last year. He said the results mean the company is “well positioned” to meet its goal of record company earnings “in the future.”
Still, the company met several challenges in the previous quarter. Cushman said persistent winter weather affected “large portions” of the company’s operating area, affecting fuel expense, maintenance expenses, insurance claims and revenue “due to reduced equipment utilization.”
P.A.M. also gave a “significant pay increase” to company drivers, which increased driver per mile costs by an average of about 13 percent.
“These company driver pay raises were followed shortly thereafter by an increase in rates paid to certain owner operators within our network,” Cushman said. “These raises were long overdue and we believe they are necessary to experience the level of growth we anticipate for the year.”
Cushman added that while driver pay increases had largely offset rate increases, the company had yet to raise rates on 55 percent of its business. He said the company was “excited about the prospect of the rate increases” and the positive affect it expects to see on operating results.
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