Hub forecasts drop in intermodal, truck brokerage
Hub Group said it expects first quarter earnings to be 15 cents to 20 cents per diluted share, compared to 35 cents in the same 2008 period.
This earnings guidance includes about $800,000 of severance as part of a previously announced restructuring plan and assumes 37.5 million diluted shares outstanding.
The company said intermodal and truck brokerage volume declined due to the continued downturn in the economy. The company expects intermodal volume to be down 5 percent to 7 percent for the first quarter.
It expects truck brokerage to be down 22 percent to 28 percent due to declines in price, volume and fuel. Hub Group estimates the decline related to fuel to be about 8 percent and that volume decline is in line with recent market trends and does not represent a loss of market share.
The company said its logistics business continues to perform well, with first quarter revenue expected to increase 18 percent to 22 percent.
“Hub Group’s freight levels and earnings continue to be impacted by the severe economic recession,” said Dave Yeager, chief executive officer. “Despite the economic challenges, each business line remains profitable, with our logistics business showing impressive growth. We remain focused on protecting our market share and servicing our customers. The cost-cutting initiatives that we previously announced are well underway and our headcount is down approximately 70 people since Jan. 1.”