Intermodal asset impairment sinks Universal Logistics’ Q3

Universal Logistics Holdings reported a large net loss for the third quarter on Friday due to a noncash impairment charge in its intermodal segment.

A $74.8 million net loss, or $2.84 per share, was driven by an $81.2 million impairment on tangible and intangible assets tied to a customer relationship. Reduced demand across its high-fixed-cost intermodal network is weighing on margins. It also flagged the potential for additional impairments, in a separate filing with the Securities and Exchange Commission.

Excluding the charge, consolidated operating income of $7 million was 85% lower year over year. An adjusted operating margin of 1.8% was 910 basis points lower y/y. Adjusted EBITDA was down 44% y/y to $43 million.

“Despite the impact of certain non-cash impairment charges recorded in the third quarter 2025, Universal’s core business model remains intact,” Universal CEO Tim Phillips said in a news release.

Universal (NASDAQ: ULH) previously postponed its quarterly release so it could further evaluate the potential impairments. It did not hold a quarterly call on Friday.

Consolidated revenue of $397 million was 7% lower y/y.

The company’s contract logistics unit reported $264 million in revenue, an 8% y/y increase. Revenue from value-added services increased 13% as total active projects increased 17% but revenue per program was off 4%. The period included $50 million in additional revenue from the acquisition of rail terminal operator, Parsec. The deal closed at the end of the 2024 third quarter.

The unit recorded a 5.2% operating margin, which was more than 13 percentage points lower y/y. Headcount in value-added services, including full-time equivalents, was up 45% y/y. Value-added revenue per employee declined 22%.

“Our contract logistics segment once again delivered favorable results and remains a central driver of our performance,” Phillips said.

Intermodal revenue was down 17% y/y to $65 million as loads fell 2% and revenue per load (excluding fuel surcharges) was down 14%. The unit booked a $10.7 million adjusted operating loss, excluding the impairment. That compared to a $1.1 million loss in the year-ago quarter.

“Although the reversal of performance trends in our intermodal franchise is taking longer to materialize, we continue to make operational improvements and will strive to return this business segment to profitability,” Phillips said.

Strong demand for Universal’s specialized heavy-haul services is helping offset a weak trucking market. The company’s trucking unit reported $68 million in revenue, a 22% y/y decline. A 5.8% operating margin was 240 bps lower y/y.