Universal Corp. (UNVR) announced a drop in its first-quarter revenue, recording $382.4 million as compared to $491.9 million during the same period last year. The company attributed the decline to a sluggish start to 2025, which CEO Tim Phillips acknowledged had a substantial impact on their overall performance. Despite gaining some positive traction later in the quarter, Universal faced significant challenges due to lower automobile production and ongoing weakness in the freight market.
These industry-wide issues not only resulted in a shortfall in top-line revenue expectations but also led to a compression in the operating margin. However, Universal remains optimistic about its long-term prospects. The company is implementing measures to boost the performance of its underperforming segments and is prioritizing strategic customer acquisition as a key pathway to achieve sustainable and profitable growth.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Universal Logistics Holdings Inc (ULH, Financial) is $37.00 with a high estimate of $37.00 and a low estimate of $37.00. The average target implies an upside of 38.01% from the current price of $26.81. More detailed estimate data can be found on the Universal Logistics Holdings Inc (ULH) Forecast page.
Based on the consensus recommendation from 1 brokerage firms, Universal Logistics Holdings Inc's (ULH, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Universal Logistics Holdings Inc (ULH, Financial) in one year is $30.13, suggesting a upside of 12.38% from the current price of $26.81. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Universal Logistics Holdings Inc (ULH) Summary page.
ULH Key Business Developments
Release Date: February 07, 2025
- Revenue Growth: 19% increase in Q4 2024; full-year revenue of $1.85 billion.
- Operating Margin: 8.2% in Q4 2024; 11% for the full year 2024.
- Earnings Per Share (EPS): $0.77 in Q4 2024; $4.93 for the full year 2024.
- Contract Logistics Revenue: Increased 52.7% to $307.4 million in Q4 2024.
- Trucking Segment Revenue: Increased 11.5% to $83.8 million in Q4 2024.
- Intermodal Segment Revenue: Decreased 15.9% to $73.1 million in Q4 2024.
- EBITDA: Increased to $73.5 million in Q4 2024 from $54.8 million in Q4 2023.
- Cash and Cash Equivalents: $19.4 million at the end of Q4 2024.
- Interest-Bearing Debt: $759.1 million at the end of Q4 2024.
- Capital Expenditures: $37.4 million in Q4 2024; $248.3 million for the full year 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Universal Logistics Holdings Inc (ULH, Financial) reported a 19% increase in top-line revenues for Q4 2024, showcasing strong financial performance.
- The contract logistics segment continues to be a standout performer, achieving double-digit operating margins and contributing significantly to overall success.
- The acquisition of Parsec has been transformational, boosting the contract logistics segment's annual revenue run rate to over $1.1 billion.
- The specialized heavy haul wind business within the trucking segment has shown robust growth, contributing to improved operating margins.
- ULH has a strong sales pipeline with opportunities totaling over $800 million, positioning the company for strategic growth.
Negative Points
- The intermodal segment faced challenges, with a 15.9% decrease in revenues year-over-year and continued underperformance.
- Operating margins in the contract logistics segment were impacted by $6 million of depreciation and amortization related to the Parsec acquisition.
- The automotive industry experienced a slight downturn in Q4 2024, affecting production schedules and potentially impacting future revenues.
- Personnel costs increased due to the integration of Parsec, adding 2,100 new employees, including 1,300 union members.
- The company anticipates continued headwinds in the intermodal segment, particularly in Southern California, affecting short-term performance.
