Marten Transport’s earnings, the first out of the gate for truckload carriers, showed some signs of the market weakness that is evident in growing capacity and falling rates, but they weren’t quite flashing red.

Some operating comparisons to the third quarter of 2021 were flat to weaker depending on the segment. There also was some sequential data from the second quarter reflecting lower numbers, though in a business as seasonal as trucking, sequential numbers have their shortcomings. 

For the bottom line at Marten (NASDAQ: MRTN), net earnings of 32 cents per share came in 1 cent less than the Wall Street consensus, according to SeekingAlpha. But earnings per share were 6 cents better than the third quarter of 2021. 

Post-earnings trading on Marten stock was negative. At approximately 6:30 p.m., its stock had declined 2.75% from its Monday close of $20. For the last 52 weeks, Marten stock has been one of the best truckload performers, rising 28.3% during that time. 

Operating revenue of $324.45 million was about $4.5 million better than forecast. Sequentially, revenue was down about $5 million from the second quarter of this year.

For the company as a whole, the year-to-year revenue growth net of fuel compared to a year ago remained strong at 21.8%. But that was still the smallest year-on-year gain for a quarter this year. The second quarter’s comparison for 2022 vs. 2021 came in at 32.1%.

The increase in operating income from 2022’s third quarter also was strong at 18.5% but was way down from the gains of 43.5% and 49.4% posted in the second and first quarters, respectively.

Total revenue growth including fuel was 29.1%. Meanwhile, total expenses including fuel were up more than 30% from a year ago, rising to $290.7 million from $222.8 million. Fuel costs rose to $57.3 million from $33.9 million.

The one segment in the company that had a significantly improved operating ratio compared to last year’s third quarter was the Dedicated division. The Dedicated OR net of fuel improved to 84.9% from 87.6% a year ago. Its operating income rose to $13 million from $8.5 million, on a gain in revenue of about $17.35 million, meaning that a large percentage of the gain in revenue fell right to the bottom line. 

The Truckload OR excluding fuel bumped up 100 basis points to 86.5%. Intermodal’s OR deteriorated to 97.6% from 89.4% as operating income fell to just $778,000 from $2.84 million a year ago. Brokerage’s OR weakened to 893% from 87.2%.

The consolidated excluding fuel OR for all of Marten, which includes truckload, dedicated, brokerage and intermodal, was 87.5% in the third quarter of 2022, a slight deterioration from 87.1% a year ago. It lagged the second-quarter number of 84.8%.

One area that showed a decline from the second quarter was the average revenue, net of fuel, per tractor per week. While the figure of $4,889 for the third quarter was significantly above the $4,411 of the corresponding quarter a year ago, it showed a small but notable downturn from the $5,080 recorded in the second quarter of this year. 

Dedicated revenue excluding fuel per tractor per week, less exposed to spot market fluctuations, also recorded a sequential decline, to $4,006 from $4,072. However, the third-quarter number for 2022 was well above the 2021 figure of $3,438.

Marten did well in attracting new drivers. In his prepared remarks for the earnings release — Marten does not do a call with analysts — Executive Chairman Randolph Marten said the driver headcount at Marten was up 199 during the quarter. 

“This growth provides momentum to the coming quarters as we began this year’s fourth quarter with 199 more of the industry’s top drivers than we employed at the beginning of the third quarter — and have now increased our number of drivers by 621, or 22.6%, since June 30, 2021.”

The road to a 30% gain in expenses included salaries, wages and benefits, which rose to just under $100 million, up from $81 million a year ago. It also was up about $4.5 million from the second quarter. 

Purchased transportation, which tends to rise in stronger markets, fell sequentially to $64.4 million from $67.5 million. However, it was still far more than the $45 million posted in last year’s third quarter.

Besides the increase in salaries, purchased transportation and fuel, supplies and maintenance jumped to $14.9 million from $11.7 million last year, insurance rose to $11.9 million from $10.5 million, and the category of “other” expenses increased to $10.2 million from $7.1 million.

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