CNF INC. EARNINGS DOWN DUE TO EMERY’s “DISAPPOINTING” RESULTS

CNF INC. EARNINGS DOWN DUE TO EMERYÆS “DISAPPOINTING” RESULTS

CNF INC. EARNINGS DOWN DUE TO EMERY'S “DISAPPOINTING” RESULTS

   CNF Inc. reported declines in earnings for the fourth quarter and full year, due largely to “disappointing” results from Emery Worldwide.
   CNF's fourth-quarter net income fell 28.8 percent to $37.8 million. Operating income was $76.4 percent, down 19.9 percent, while revenue rose 5 percent to $1.44 billion.
   For the full year, net income fell 30.4 percent to $126.8 million. Operating income declined 18.1 percent to $290 million, while revenue increased 11 percent to $5.6 billion.
   Revenue and full-year results exclude Priority Mail activities, which were classified under discontinuing operations.
   '”Our financial achievements in the fourth quarter and year 2000 were mixed,” said Gregory L. Quesnel, CNF president and chief executive officer. “Menlo Logistics had a banner year and con-Way Transportation Services had another strong year while Emery Worldwide did not meet its financial targets.”
   Emery's fourth-quarter operating income dropped 54.7 percent to $14.5 million, while revenues rose 7 percent to $723.8 million. Full-year operating income dropped 46.6 percent to $40.3 million, including a non-recurring charge for losses on terminated aircraft leases in the third quarter. Full-year revenues rose 8 percent to $2.6 billion.
   'Emery's results remain disappointing and were exacerbated by the cooling economy in the U.S. in the fourth quarter,' Quesnel said. 'Emery is focusing on service consistency, yield enhancement, market sizing and cost reductions, which are expected to improve results.
   Con-Way Transportation Services saw operating income slide 6.5 percent to $53.4 million on revenue of $490.4 million, relatively flat compared to the fourth quarter of 1999. For the full year, net income rose 2 percent to $232.8 million, excluding a charge for the sale of certain truckload assets in the third quarter. Revenue for the full year rose 8.5 percent to a record $2.04 billion.
   Menlo saw fourth-quarter operating income rise 40 percent to $8.6 million on revenues of $216.7 million, up 11 percent. For 2000, operating income was $33.3 million, up 50 percent, while revenue was $890.8 million, up 24 percent.
   CNF expects volume trends at Con-Way and Emery to be in line with the fourth quarter and pricing environment to remain firm.
   For Menlo, revenue and operating income are expected to continue to increase at about 20 percent year over year, the company said. The company expects startup costs for Vector SCM, a joint venture with General Motors formed in December, to be about $6 million for the first quarter.