EGL’s 2nd quarter profit up 16.5%

EGL’s 2nd quarter profit up 16.5%    Houston-based EGL Inc., a provider of transportation and supply chain management services that operates under the name EGL Eagle Global Logistics, reported net income of $14.8 million in the second quarter, up 16.5 percent compared to $12.7 million a year ago.
   EGL’s operating income in the latest quarter improved 26.2 percent to $26.5 million from $21 million in the second quarter 2005. Gross revenue for the period dropped 1.3 percent to $771.3 million from $781.3 million last year.
   “The gross revenue decline relates to the company’s decision last year to re-evaluate and aggressively address specific business that did not generate acceptable levels of operating income. Additionally, ocean gross revenues were impacted by price declines as additional container ship capacity was introduced into certain ocean trade lanes,” EGL said.
   Overall net revenues at EGL rose 5.6 percent to $249.7 million. The company’s net revenue margin, defined as net revenues divided by gross revenues, improved to 32.4 percent in the latest quarter, from 30.3 percent a year earlier. EGL said the improved net revenue was driven by a 19 percent increase in ocean freight forwarding, an 11 percent increase in customs brokerage and other and a 1 percent rise in air freight forwarding.
   “Our operating income growth and improved operating margins for the second quarter reflect increased net revenues and continued emphasis on controlling all operating expenses. We continue to focus the organization on profitable revenue growth across all product lines and increasing operating income in all geographic locations,” said Jim Crane, EGL’s chief executive officer.
   EGL closed the quarter with $146 million in cash, restricted cash and short-term investments and total debt of $193 million.
   After six months, EGL’s net income increased 30.2 percent to $25.9 million. Operating income was up 39.5 percent to $48.4 million with gross revenue up 2.8 percent to $1.52 billion. Net revenue in the first half went up 8.2 percent to $486.9 million with net revenue margin of 32 percent from 30.4 percent in the same period last year.
   The company’s share price dropped 4.34 percent, or by $1.89 to $38.82 at close Monday on the NASDAQ Stock Exchange.