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UL

UNIVERSAL LOGISTICS HOLDINGS, INC. (ULH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was muted but broadly in line with prior guidance: revenue $393.8M, EPS $0.32, operating margin 5.1%, EBITDA $56.2M; year-over-year declines driven by continued weak freight, lower auto production YoY, and the absence of last year’s specialty development project revenues .
  • Slight misses vs S&P Global consensus: revenue ($393.8M vs $398.5M), EPS ($0.32 vs $0.34), EBITDA ($56.1M vs $57.2M)*; thin coverage (one estimate) reduces signal strength; intermodal loss narrowed sequentially, offering a potential stabilization narrative .
  • Guidance: Q3 revenue $390–$410M; operating margin 5–7%; EBITDA margin 14–16%; FY 2025 revenue $1.6–$1.7B with similar margin profile; capex (equipment) $100–$125M maintained, real estate trimmed to $50–$65M, interest expense $48–$51M; quarterly dividend maintained at $0.105 .
  • Catalyst: execution on intermodal profitability initiatives (target return to profitability by Q3/Q4), contract logistics momentum including Parsec integration, and tariff dynamics affecting discount retailers/imports could drive estimate revisions and sentiment .

What Went Well and What Went Wrong

What Went Well

  • Contract logistics remained the cornerstone: Q2 revenue $260.6M and operating income $21.8M (8.4% margin); Parsec contributed $55.0M; program count increased to 87 including 20 rail terminals, demonstrating scale and pipeline depth .
  • Trucking held margin resilience in a depressed market: revenue $64.1M, operating income $3.3M (5.2% margin); strategy anchored in specialized heavy-haul (wind) supports more resilient economics and sequential improvement .
  • Management emphasized commercial enhancements: “We have a new executive leadership…rolling out a new CRM…better visibility into our growing $1 billion sales pipeline,” aiming to drive margin growth in coming quarters .

What Went Wrong

  • Intermodal underperformed despite progress: revenue $68.9M, operating loss $(5.7)M (OR ~108.2); YoY volumes down 12.9%, tariff-driven import softness from discount retailers with Chinese sourcing impacted volumes in late Q2 .
  • YoY compression across consolidated metrics: operating income fell to $19.9M (from $47.1M), EBITDA to $56.2M (from $84.8M), and EPS to $0.32 (from $1.17), reflecting weak freight backdrop and tough comps .
  • Elevated D&A tied to Parsec weighed on margins, and trucking loads fell 22.6% YoY with revenue-per-load ex-fuel down 8.9%; segment revenue also pressured by the closure of a prior brokerage operation .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$465.1 $382.4 $393.8
Net Income ($USD Millions)$20.2 $6.0 $8.3
EPS ($)$0.77 $0.23 $0.32
Operating Income ($USD Millions)$38.3 $15.7 $19.9
Operating Margin (%)8.2% 4.1% 5.1%
EBITDA ($USD Millions)$73.5 $51.7 $56.2
EBITDA Margin (%)15.8% 13.5% 14.3%

Segment breakdown

Segment MetricQ4 2024Q1 2025Q2 2025
Contract Logistics Revenue ($M)$307.4 $255.9 $260.6
Contract Logistics Operating Income ($M)$39.1 $23.9 $21.8
Contract Logistics Operating Margin (%)12.7% 9.3% 8.4%
Intermodal Revenue ($M)$73.1 $70.7 $68.9
Intermodal Operating Income ($M)$(9.7) $(10.7) $(5.7)
Intermodal Operating Margin (%)(13.2)% (15.1)% (8.2)%
Trucking Revenue ($M)$83.8 $55.6 $64.1
Trucking Operating Income ($M)$5.8 $2.2 $3.3
Trucking Operating Margin (%)6.9% 3.9% 5.2%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Value-Added Programs (#)90 87 87
Intermodal Loads (#)100,457 101,470 94,327
Intermodal Avg Rev/Load ex-fuel ($)$537 $517 $556
Intermodal Tractors (#)1,451 1,401 1,392
Trucking Loads (#)36,068 28,622 31,451
Trucking Avg Rev/Load ex-fuel ($)$2,183 $1,874 $1,927
Trucking Tractors (#)699 633 602
Trucking Avg Length of Haul (miles)394 393 369

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q3 2025N/A$390–$410 New
Operating Margin (%)Q3 2025N/A5–7% New
EBITDA Margin (%)Q3 2025N/A14–16% New
Revenue ($B)FY 2025N/A$1.6–$1.7 New
Operating Margin (%)FY 2025N/ASimilar to Q3 (5–7%) New
EBITDA Margin (%)FY 2025N/ASimilar to Q3 (14–16%) New
Capex – Equipment ($M)FY 2025$100–$125 $100–$125 Maintained
Capex – Real Estate ($M)FY 2025$55–$65 $50–$65 Lowered (bottom end)
Interest Expense ($M)FY 2025$48–$51 $48–$51 Maintained
Dividend per Share ($)Quarterly$0.105 $0.105 (payable Oct 1) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
Intermodal profitabilityQ4: deep losses; freight depressed; brokerage closure context . Q1: OR 115.1%, loss $(10.7)M; bottoming; new sales team .Loss narrowed to $(5.7)M; OR ~108.2; goal to return to profitability in Q3/Q4 .Improving sequentially; targeted turnaround
Tariffs/macroQ1: Expected ~15% import reduction mid/late May; wait-and-see across customers .Discount retailers with Chinese sourcing saw volume falloff in late Q2; broader import uncertainty persists .Headwind in intermodal; potential Q3 cyclical uplift
Automotive productionQ1: slow start Jan; strong rebound Feb–Mar; OEMs unwound inventories; outlook constructive .Slightly lower YoY production; still “decent look” for H2; U.S. production shifts supportive .Stable-to-cautious; supportive footprint
Trucking – wind heavy-haulQ1: strategy pivot to specialized; rising rev/load ex-fuel .Margins improved to 5.2%; wind cadence expected to pick up in H2 under incentives .Building; H2 tailwind expected
Commercial engine/CRMQ1: strong pipeline and customer engagement .New exec leadership; CRM rollout; $1B pipeline visibility; drive margin growth .Scaling sales; expected margin uplift
Regulatory (NOx 2027)N/ARollback muting anticipated pre-2027 pull-forward; Class 8 orders very weak vs 2020 .Weighs on Class 8-related volumes
Inventory-to-sales ratiosQ1: OEM inventories down; improved days supply .ISR flattish/down YoY across retail/wholesale/manufacturing; could catalyze back-half restock .Potential H2 demand stabilization

Management Commentary

  • “Universal’s results for the second quarter, although muted, were broadly in-line with our previously guided expectations.” – Tim Phillips, CEO .
  • “Our intermodal franchise continues to underperform, [but] we are making progress…narrowing our losses on a quarter-over-quarter basis.” – Tim Phillips, CEO .
  • “We…began rolling out a new customer relationship management solution…provide better visibility into our growing $1 billion sales pipeline.” – Tim Phillips, CEO .
  • “For the third quarter of 2025, we are expecting top-line revenues between $390 and $410 million, operating margins in the 5%–7% range, and EBITDA margins between 14%–16%.” – Jude Beres, CFO .
  • “Our goal is to return to profitability in the third or fourth quarter [in intermodal]…full-court press on the sales side…parallel path to streamline operations.” – Steven Fitzpatrick, VP Finance & IR .

Q&A Highlights

  • Tariffs and volumes: Discount retailers with Chinese sourcing drove late-Q2 intermodal volume softness; management expects some cyclical uplift in Q3 but remains cautious on import outlook .
  • Intermodal timeline: Targeting a return to profitability in Q3/Q4 via sales leadership, pricing, centralization, headcount rationalization, and spot market capture .
  • Class 8/auto backdrop: Class 8 orders weaker than Q2 2020; multiple macro headwinds (tariffs on steel/aluminum, soft trucking backdrop, emissions standard changes) temper outlook; autos remain relatively steady with U.S. production shifts supportive .
  • Trucking growth levers: Legacy agent-based business pressured by industrial recession; investing in wind heavy-haul and recruiting agents; expanding into other heavier-haul opportunities .
  • Guidance clarifications: Q3 revenue/margin ranges and FY 2025 revenue/margins reiterated; capex and interest expense maintained (real estate bottom end trimmed) .

Estimates Context

Actuals vs S&P Global consensus (Q2 2025)

MetricConsensus*ActualSurprise
Revenue ($USD Millions)398.5*393.8 -$4.7
EPS ($)0.34*0.32 -$0.02
EBITDA ($USD Millions)57.2*56.1 -$1.1

Values retrieved from S&P Global.*

  • Coverage is thin (1 estimate for revenue/EPS), so “misses” are directional rather than definitive; modest underperformance aligns with management’s muted tone and intermodal drag .

Key Takeaways for Investors

  • The print was modestly below consensus on revenue/EPS/EBITDA, but broadly matched internal expectations; narrative hinges on sequential intermodal improvement and H2 stabilization in trucking/contract logistics .
  • Watch Q3 execution: hitting $390–$410M revenue and 5–7% operating margin with 14–16% EBITDA margin will validate the sequential improvement story and support FY $1.6–$1.7B guidance .
  • Intermodal is the swing factor: management targets profitability by Q3/Q4; tariff policy and discount retailer imports remain wildcards impacting near-term volumes .
  • Contract logistics durability plus Parsec integration underpin medium-term thesis; expanding value-added programs and rail terminal operations provide scale and cross-sell opportunities .
  • Trucking resilience via specialized heavy-haul (wind) supports margin stability; incentives could accelerate cadence in H2 and 2027–2029 project windows .
  • Balance sheet/capex: Q2 capex $84.3M, net debt ~$795.5M; FY capex maintained with slightly lower real estate range; interest expense guidance unchanged—monitor cash generation vs investment pace .
  • Near-term trading: stock likely sensitive to intermodal profitability milestones, tariff headlines, and Q3 margin delivery; medium-term rerating depends on sustained margin expansion and sales engine effectiveness .