Con-way Inc. on Wednesday, May 5, reported a net loss for the first quarter of 2010 of $4.0 million compared compare to a first-quarter 2009 net loss of $154.0 million. The net loss included a $2.3 million tax charge related to recently-enacted healthcare legislation and a $2.8 million pre-tax charge for the write-off of a customer-relationship intangible asset related to the 2007 acquisition of Chic Logistics.
First-quarter 2009 results included a goodwill-impairment charge at Con-way Truckload of $134.8 million and a $2.7 million tax benefit from a now-expired fuel-related tax credit. Revenue for the 2010 first quarter was $1.16 billion, a 20.7 percent increase. Operating income was $14.4 million compared to an operating loss of $150.3 million, primarily reflecting the prior-year goodwill-impairment charge.
Douglas W. Stotlar, president and chief executive officer of San Mateo, Calif.-based Con-way, said that the freight and logistics markets improved each month in the quarter as the economy continued its recovery.
Con-way Freight, the company’s less-than-truckload operation, reported:
• Revenue of $725.0 million, a 26.3 percent increase over $573.8 million.
• Operating loss of $3.2 million compared to an operating loss of $23.4 million. Results were affected adversely by persistently weak LTL industry pricing, but benefited from employee-related cost-saving initiatives implemented in April 2009.
• Tonnage per day increased 34.8 percent.
• Yield declined 7.8 percent, primarily reflecting continued pressure on pricing in the competitive LTL market, and the effect of a 9.3 percent increase in weight per shipment. Excluding the fuel surcharge, yield declined 11.2 percent.
• Operating ratio was 100.4 compared to 104.1.
“Con-way Freight experienced sequential tonnage gains month-to-month that were stronger than historical seasonal data would indicate,” Stotlar said. “The LTL supply/demand equation is undergoing a slow but steady shift, which should lead to stronger pricing, but it will take some time for capacity to fully rationalize, dampening our expectations for significant expansion of LTL operating margins in the near term.”
Menlo Worldwide Logistics, the company’s global logistics and supply chain management operation, reported:
• Revenue of $355.2 million, up 12.2 percent from $316.5 million. Revenue growth was from both transportation management and warehouse management services.
• Net revenue of $144.2 million, which increased 15.2 percent from $125.2 million. The improvement reflects contributions from warehouse management services as well as transportation management revenue, which due primarily to higher performance- based revenue grew by a larger amount than purchased transportation expense.
• Operating income of $12.9 million (including the $2.8 million expense for the acquisition-related write-off), a record for quarterly profit and a 158.5 percent increase from $5.0 million. The record operating income reflects the increase in net revenue and improved operating margins on both warehouse and transportation management services.
