Why Shares of Marten Transport, Ltd. Are Accelerating Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of truck shipping company Marten Transport, Ltd are revving up as much as 8.6% today following release of the first-quarter-earnings results.
So what: Pro-forma and adjusted revenue jumped 6.9% to $127.5 million. Net income slipped 26% to $5.3 million, or $0.16 per share, slightly missing analysts' expectation of $0.17 per share. According to the company, the dip in operating profit came mostly from a "reduction in the gain on disposition of revenue equipment and an increase in supplies and maintenance."
The "severe weather conditions" that affected the industry as a whole hit both its volumes and costs, according to Marten Transport. Weather problems are of course only temporary. We have seen many other trucking companies report similar results. Echo Global Logisticssaid "terrible weather conditions", and Swift Transportation Companynoted "severe weather", affected everybody. This factor was especially true east of the Rockies where, according to Swift Transportation, "the weather impact was substantial."
Now what: Marten Transport's outlook helped to lift shares to 52-week highs. Randolph L. Marten, chairman and CEO, stated, "We are better positioned than ever for the remainder of 2014 and beyond based on the current freight environment and the continued improvements we are driving in freight network efficiencies within our diverse service infrastructure." He noted that even through the tough winter weather, Marten Transport was able to improve revenue per tractor by 3.9% on a year-over-year basis.
This suggests that as costs come down with improving weather and road conditions, Marten Transport should see profit margins and overall profitability go up. For just about any industry, during times of unusually high and temporary costs, the ability to maintain and grow revenues like Marten Transport was able to do is remarkable, and makes you wonder how much more improved the numbers may have been had the conditions cooperated. We shall find out in future quarters.
2 stocks changing the retail world
To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.
The article Why Shares of Marten Transport, Ltd. Are Accelerating Today originally appeared on Fool.com.Nickey Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.