Marten Transport profit doubles on surcharges
Chairman and Chief Executive Randolph L. Marten said freight demand has been "relatively soft" in October. Due to the economy, he doesn't expect retailers to build or refresh their inventories to normal fourth-quarter levels.
The Associated Press
10/21/2008
MONDOVI, Wis. — Marten Transport Ltd., which ships food and other goods in temperature-controlled trucks, said Monday that its third-quarter profit doubled as fuel surcharges increased even while diesel prices fell.
The company said, however, it expects freight demand to decline in the fourth quarter compared with the same period last year.
Chairman and Chief Executive Randolph L. Marten said freight demand has been "relatively soft" in October. Due to the economy, he doesn't expect retailers to build or refresh their inventories to normal fourth-quarter levels.
For the quarter ended Sept. 30, the company earned $6.1 million, or 28 cents per share, compared with $3.1 million, or 14 cents per share, a year ago. Revenue rose 13 percent to $163.4 million from $145 million.
The results topped estimates of analysts polled by Thomson Reuters, who expected Marten to earn 19 cents per share on revenue of $162.4 million.
Fuel surcharges accounted for increase, as the company collected $41.3 million from the fees, up from $22.6 million a year ago. Diesel prices eased during the third quarter, but the company's average price for the fuel still rose to $4.01 a gallon from $2.83 a gallon a year ago.
The Mondovi-based company receives its fuel surcharges on a delayed basis, which had the effect of boosting revenue even as diesel prices declined for much of the third quarter.
If fuel prices remain steady in the fourth quarter, the company said, it expects fuel to be a higher percentage of revenue in the fourth quarter than it was in the third.
Marten said the decline in fuel prices of late has kept some carriers, who otherwise would have closed up shop, able to stay in business -- increasing capacity and depressing pricing. Marten said it will protect its truckload rates by sizing its fleet to existing demand, expanding its logistics, intermodal and regional operations, aggressively controlling costs and exploring new business opportunities.