Con-way’s 2012 profits up despite lower 4Q

   The freight transportation and logistics company Con-way on Thursday said it had operating profit of $228.8 million in 2012, a 10.1 percent increase from 2011.
   Net income for the company, which operates in the less-than-truckload, truckload, and logistics segments, improved 18.2 percent to $104.5 million.
   The annual results came despite a drop in operating and net profit in the fourth quarter. Revenue for 2012 was $5.6 billion, a 5.5 percent increase from 2011.
   “Good cost controls and strong productivity during the quarter helped to mitigate the impact of a generally weak economic environment,” Con-way President and Chief Executive Officer Douglas W. Stotlar said of the fourth quarter results. “While the unsettled economic conditions contributed to declining tonnage trends throughout the quarter, our LTL company increased yield and improved operational efficiency. We remain on track with the key elements of our three-year plan, and we expect the investments that we have made will improve our operational performance and financial results, particularly over the second half of this year.”
   The investment bank Stifel Nicolaus said in a note Thursday about Con-way’s results that the company’s equity valuation suffers from having three different business segments (LTL, truckload, and logistics) and so it gets stuck with the “lowest common denominator,” which Stifel Nicolaus identified as LTL.
   “Most important from our perspective was the company’s improved performance in its freight division (which represents around 60 percent of revenue and earnings before intcome and tax), the bank said. “While we remain cautious on 1Q13 earnings (as 1Q is always the weakest seasonal quarter for truckers) we believe further productivity improvements underway at freight should show themselves when tonnage improves (seasonally) in 2Q13. The company’s margins are still well below prior average levels and have plenty of room to run.” – Eric Johnson