Con-way reports earnings up, demand weak
Freight transportation firm Con-way Inc. beat Wall Street expectations Wednesday, reporting third quarter net income rose 4.8 percent to $40.8 million, even as the firm saw demand begin to drop late in the quarter.
The San Mateo, Calif.-based firm said net income was 81 cents per diluted share, ahead of the 65 cents per share analysts expected.
Revenue jumped 23.3 percent to $1.37 billion from $1.11 billion in the year ago period, easily surpassing analysts’ estimate of $1.29 billion. Con-Way said the increase reflected 'organic growth' and the effect of acquisitions completed in 2007.
Operating revenue increased 16.6 percent to $78.92 million, compared to $67.7 million earned in the third quarter a year ago.
'Our core operations turned in results that were consistent with our updated earnings guidance, and as expected, were affected by weakening demand and a difficult pricing environment,' said Douglas Stotlar, Con-way president and chief executive officer.
Con-way Freight, the firm's less-than-truckload business unit, reported a third quarter uptick in tonnage but profit growth for the unit remained hampered by decelerating demand and increasing competitive pressure on pricing.
The firm's Menlo Worldwide Logistics unit reported double-digit growth in net revenues but saw income decline below last year’s third quarter. Stotlar said the unit was hurt by losses in China due to high integration costs, but added that the China business would “turn the corner by the end of the year.'
Menlo's third quarter results were also affected as customers were forced to implement reductions in supply chain costs due to the worsening national and world economies, Stotlar said.
Con-way reports earnings up, demand weak
