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Con-way Reports $31.5 Million Profit
Friday, 24 July 2009 00:00

Revenue tops $1 billion as LTL unit demand edge up, pricing slide

Trucking and logistics company Con-way returned to profitability in the second quarter, reporting $31.5 million in net income on $1.1 billion in revenue. The company lost $153 million in the first quarter, on $962.9 million in revenue.

Sequential month-to-month growth in freight volume and demand for logistics services helped lift the company despite the recession and pressure from customers to lower its rates. Con-way also credited savings from cost-cutting initiatives, including layoffs and salary and wage reductions.

Overcapacity in the less-than-truckload and truckload markets is keeping a lid on pricing, however, limiting the company's ability to improve its yield.

"Until the market's excess capacity is resolved, we expect the pricing environment to remain competitive," said President and CEO Douglas W. Stotlar.

The net profit was 35 percent behind Con-way's earnings in the second quarter a year ago and overall revenue fell 21.2 percent, including a 22.6 percent drop in revenue at the core

Con-way Freight less-thantruckload unit. Con-way Freight had an operating profit of $49 million, down 36.7 percent from the $77.4 million earned in the same period of 2008. Its revenue of $638 million came with a 7 percent drop in tonnage per day in a declining LTL market.

Con-way Truckload, the former Contract Freighters, saw profit plunge 44.7 percent to $6.9 million on $89.8 million in revenue. Like many of its competitors, the truckload unit sold trucks in the quarter, cutting 195 tractors from its fleet.

Menlo Worldwide Logistics, however, saw profit jump 57.4 percent to $7.8 million, despite a 13.3 percent drop in revenue to $327 million. The logistics provider benefited from new customers that helped offset a decline in transactional volumes and pricing pressure from existing accounts.

"Recessionary times provide opportunities for logistics companies, and Menlo has done a good job helping its customers weather the downturn," Stotlar said.

Journal of Commerce, 7/24/2009