Third-party logistics provider Hub Group returned to profitability in the third quarter after sustaining losses over several rocky quarters.
Lombard, IL-based Hub posted net earnings of 18 cents a share in the third quarter, compared to a 14-cent per share loss in the same quarter in 2001 and a 29-cent per share loss in the second quarter of this year.
Overall revenue for Hub increased 10.4% in the third quarter to $356.6 million compared with the same period last year. The company's supply chain division had the biggest improvement, with revenues increasing 22.7% to $27.4 million, followed by its intermodal division, with a 13.3% gain in revenues to $249.2 million.
Hub said, however, that its gross margin as a percentage of revenue increased only slightly in the third quarter, rising to 11.9% from 11.2% in the second quarter. That trails last year's third quarter gross margin rate of 13.8%, largely due to lower intermodal margins, resulting price competition and higher transportation costs.
The company added that it is also trying to expand and to slash operating costs to boost both revenues and profits. Hub recently signed a deal with Grupo TMM of Mexico to form a joint network to manage freight moving between Canada, the United States and Mexico. Hub is also planning to cut overhead and jobs in an effort to save approximately $10 million annually beginning in 2003.