Universal Logistics' GAAP Profit Jump Masks Weaker Core Earnings
Universal Logistics Holdings (ULH) reported second-quarter earnings per share of $0.99, but adjusted EPS excluding a one-time property gain was just $0.16, down from $0.32 a year earlier.
Universal Logistics Holdings (ULH) reported a swing to GAAP profitability in the second quarter that obscured a decline in underlying earnings. The trucking and logistics company posted operating income of $45.1 million, an 11.9% margin, up from $19.9 million and a 5.1% margin a year earlier. The improvement traced almost entirely to a $45.3 million gain on the sale of the company's Kearny, New Jersey property, partly offset by a $3.9 million tractor impairment and $12.3 million in legal charges, items that together added $29.1 million to operating income and that did not appear in any of the prior four quarters' releases.
Stripped of those items, adjusted operating income was $16.0 million, a 4.2% margin, down from $19.9 million and 5.1% a year earlier. Adjusted EBITDA fell to $49.2 million from $56.2 million, with margin compressing to 13.0% from 14.3%, extending a pattern of margin erosion that also showed up in the first quarter's 11.1% EBITDA margin and the fourth quarter of 2024's 14.8%. GAAP earnings per share swung from a $(0.13) loss in the first quarter to $0.99 in the second, but adjusted EPS was $0.16, down from $0.32 in the second quarter of 2024.
Revenue was $379.3 million, down 3.7% from $393.8 million a year earlier, though it rose 3.2% sequentially from $367.6 million in the first quarter. The sequential improvement came almost entirely from contract logistics, which grew revenue 4.2% YoY to $271.4 million and expanded operating margin to 9.1% from 8.4%, continuing a recovery from 6.5% in the first quarter. That gain came even as the segment's active value-added programs slipped to 79 from 87 a year earlier, matching the first quarter's count but below the 78 seen in the fourth quarter of 2024.
Intermodal remained the company's weak point. Segment revenue fell 36.0% YoY to $44.1 million, a steeper drop than the first quarter's 32.3% decline and the fourth quarter's 27.9%, with load volumes down 34.0% YoY and revenue per load excluding fuel down an additional 6.3%. The segment posted a $(10.4) million operating loss and a (23.7)% margin, worse than the $(5.7) million loss a year earlier and roughly in line with the first quarter's $(13.1) million loss. Both volume and pricing pressure in intermodal are intensifying rather than stabilizing.
Trucking showed a different dynamic. Segment revenue was roughly flat YoY at $63.8 million, reversing sharper declines of 9.7% in the first quarter and 23.6% in the fourth quarter of 2024. Load volumes fell 15.7% YoY, but average revenue per load excluding fuel rose 15.5%, a volume-for-price tradeoff that still left operating margin compressed to 4.5% from 5.2%.
The Kearny sale, the tractor impairment and the legal charges were disclosed together for the first time this quarter, and none of the three had appeared in the four prior releases. The company also reduced net debt to $692.6 million as of July 4, 2025, from $797.6 million at the end of 2024, a roughly $105 million reduction that partly reflects proceeds from the property sale. The quarterly dividend held at $0.105 a share for a fifth straight quarter, unchanged through the earnings swings.
The results followed a CFO transition between the fourth-quarter 2024 and first-quarter 2025 releases, with Michael Rogers named CFO and treasurer effective June 1, 2025, succeeding Jude Beres, who resigned effective May 29, 2025 after nearly three decades at the company. With intermodal losses widening and adjusted earnings per share less than half of last year's level, the quarter's headline profit depended on a real-estate sale rather than on operating performance.