Mullen Group's Earnings Exceed Expectations, Full-Year Forecast Raised

Canadian trucking and logistics company, Mullen Group, has reported better-than-expected third-quarter earnings, causing its shares to climb. The company now projects that its full-year financial results will surpass earlier projections, thanks to positive signs within the industry.

Strong Third-Quarter Results

Mullen's shares rose by 4.5% to C$13.99 on Thursday, reducing the stock's year-to-date drop to 3.9%. The company's positive outlook for the remainder of 2023 is based on encouraging fundamentals. There is a growing consensus that the economy will avoid a recession, allowing consumer demand to maintain current levels throughout the year. Murray Mullen, the company's chair and senior executive officer, mentions several "green shoots" indicating that inventory levels are stabilizing, suggesting that freight demand may follow suit.

Acquisition Opportunities and Revenue Projections

Mullen Group is actively assessing various acquisition opportunities. In January, the company announced its revenue budget of 2 billion Canadian dollars ($1.46 billion) for 2023. This projection includes C$800 million from its less-than-truckload segment and C$600 million from its logistics and warehousing arm.

Impressive Third-Quarter Performance

During the third quarter, Mullen Group's net income rose to C$39.1 million, or C$0.42 per share, compared to C$38 million, or C$0.39 per share, in the same period last year. On an adjusted basis, the company's earnings reached C$0.43 per share, surpassing the mean forecast of C$0.35 by analysts polled by FactSet.

In-line Revenue with Some Setbacks

Although revenue for the quarter remained in line with market expectations at C$504 million, it experienced a 2.8% decline. This decrease can be attributed to lower fuel-surcharge revenue and weaker freight demand in select operating segments.