Con-wayÆs earning’s slide 55% in 4th quarter
San Mateo, Calif.-based freight transportation and logistics company Con-way Inc. on Monday reported net income of $36.9 million for the fourth quarter of 2007, down 54.9 percent against $81.8 million posted in the same quarter a year before.
The company said its earnings in the last quarter were affected by a before-tax charge of $7.7 million for office closures, relocations and severance at its regional less-than-truckload unit Con-way Freight. Con-way’s results for the 2006 fourth quarter included a net gain of $41 million from the sale of Vector SCM, its former logistics joint venture with General Motors.
Con-way’s operating income in the fourth quarter declined 36.2 percent to $70 million although revenue gained 20.2 percent to $1.2 billion.
Revenue in the quarter contributed by Con-way Freight improved 9.1 percent to $739.2 million with tonnage handled up 6.1 percent. The LTL carrier’s operating income dipped 10 percent to $55.2 million.
Menlo Worldwide Logistics, Con-way’s global logistics and supply chain management brand, posted 6.7 percent higher revenue of $340.1 million, while operating income in the quarter was down 24.9 percent to $5.9 million.
Con-way Truckload, the division created out of the merger of Con-way’s existing small truckload unit and Contract Freighters acquired in August, reported quarterly revenue of $118.4 million and operating income of $8.8 million.
For the whole of 2007, Con-Way reported net income of $146.8 million, a 44.6 percent decrease from $265.2 million in 2006. Operating income for the year was $264.5 million, down 34.2 percent from $401.8 million. Revenue rose 3.9 percent to $4.39 billion from $4.22 billion in 2006.
“While a challenging economic environment clearly affected our full-year results, I was encouraged with the improvement in Con-way Freight’s year-over-year operating performance for the quarter,” said Douglas W. Stotlar, Con-way’s president and chief executive officer.
Stotlar said the markets for the company’s LTL and full-truckload services are expected to remain highly competitive in the year ahead. “In a difficult economy where opportunities to improve margin are limited, operational execution becomes critically important,” he said. “We took specific actions in 2007 to respond to the market and reposition our businesses. These will continue into 2008, as will our focus on providing customers with reliable, premium-value LTL and truckload transportation services.”
The Con-way chief said he is encouraged by the overall market for global logistics services. “With its strategic acquisitions in Asia and expanding customer base, Menlo Worldwide Logistics is poised for solid growth, particularly as multinational businesses increase their reliance on third-party logistics to enhance global supply chain efficiency. Menlo has the people, technologies and scalable network to fully engage in these opportunities and increase its market share.”
Con-way has forecast full year 2008 earnings from continuing operations to be $3.40 to $3.80 per diluted share.
“As a result of our acquisitions and transformation initiatives in 2007, we strengthened our operations and significantly broadened our market footprint. Our people did a commendable job in a tough year. Their achievements demonstrate the competitive differentiation Con-way delivers to customers, and the opportunity for enhanced shareholder value in 2008 and beyond,” Stotlar said.