Con-way says 4Q net income down, revenue up

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Con-way Inc. on Monday, Jan. 28, reported net income from continuing operations for the fourth quarter of 2007 of $36.9 million, compared with fourth-quarter 2006 net income from continuing operations of $81.8 million.

Con-way said earnings were affected by a before-tax charge from business transformation initiatives at Con-way Freight of $7.7 million for office closures, relocations and severance. Results for the 2006 fourth quarter included a net gain of $41.0 million from the sale of Vector SCM, the company’s former logistics joint venture with General Motors Corp.

Revenue was $1.20 billion, an increase of 20.2 percent from last year’s fourth-quarter revenue of $1.0 billion. Operating income in the 2007 fourth quarter was $70.0 million, down 36.2 percent from $109.8 million earned in the fourth quarter a year ago.

For the full-year 2007, Con-way reported net income from continuing operations (after preferred dividends) of $146.8 million compared with $265.2 million (after preferred dividends) in 2006. The before-tax effect of the restructuring charge at Con-way Freight on 2007 full-year results was $13.2 million. The 2006 full-year results included gains of $47.3 million from the sale of Vector and Con-way Expedite.

Including the effect of discontinued operations, net income to common shareholders for the full-year 2007 was $146.0 million compared to net income to common shareholders in 2006 of $259.0 million.

Revenues for full-year 2007 rose to $4.39 billion from 2006’s revenues of $4.22 billion, a 3.9 percent increase. Operating income was $264.5 million compared with $401.8 million 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, president and chief executive officer of San Mateo, Calif.-based Con-way. Stotlar noted that markets for the company’s less-than-truckload and full-truckload services are expected to remain highly competitive throughout 2008.

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“In a difficult economy where opportunities to improve margin are limited, operational execution becomes critically important,” Stotlar 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.”

Stotlar also was encouraged with 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,” he said. “Menlo has the people, technologies and scalable network to fully engage in these opportunities and increase its market share.

“As a result of our acquisitions and transformation initiatives in 2007, we strengthened our operations and significantly broadened our market footprint,” Stotlar said. “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.”