Con-way 2Q posts lower 2Q net income

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Con-way Inc. on Thursday, July 23, reported net income for the second quarter of 2009 of $31.5 million compared to second-quarter 2008 net income of $48.7 million. The 2008 second-quarter net income included a net gain from discontinued operations of 4 cents per diluted share. Revenue was $1.06 billion, a decrease of 21.2 percent from $1.34 billion. Operating income was $66.0 million, a decrease of 30.5 percent compared to $94.9 million.

“Despite the challenges of the recessionary economy and a weak freight market, we returned the company to profitability,” said Douglas W. Stotlar, presdient and chief executive officer of Con-way, based in San Mateo, Calif. “These results are a testament to the solid execution by Con-way’s employees at all of our business units, and the benefit of cost-reduction measures implemented in April.”

Con-way Freight, the company’s less-than-truckload operation, reported:

  • Operating income of $49.0 million, a decrease of 36.7 percent from $77.4 million. The quarter benefited from expense reductions as well as effective sales initiatives and strong operational execution;
  • Revenues of $638.0 million, a 22.6 percent decrease from $824.0 million; and
  • An operating ratio of 92.5 compared to 90.8.
  • Con-way Freight saw its volumes improve sequentially each month in the quarter, Stotlar said. “Con-way Freight’s reliable service performance, coupled with successful sales execution, is driving an uptick in market share,” he said. “While there was some benefit from normal seasonality, the consistent month-to-month sequential growth was an encouraging trend. However, until the market’s excess capacity is resolved, we expect the pricing environment to remain competitive.”

    Menlo Worldwide Logistics, the company’s global logistics and supply chain management operations, reported:

  • Operating income of $7.8 million, a 57.4 percent increase from $5.0 million. Excellent cost controls across all of Menlo’s industry vertical groups benefited the 2009 second-quarter operating income, while income for the previous-year second quarter was reduced by writedowns on two customer contracts;
  • Revenue of $327.0 million, down 13.3 percent from $377.1 million; and
  • Net revenue of $126.7 million compared to $126.6 million. Net revenue performance benefited from new contract wins, which helped offset recession-induced declines in transactional volumes and pricing pressures from existing accounts.
  • Menlo Worldwide Logistics delivered a solid quarter, Stotlar said. “Recessionary times provide opportunities for logistics companies, and Menlo has done a good job helping its customers weather the downturn,” he said. “Menlo’s quarterly performance can be attributed to new contract wins, continued operational excellence and prudent cost management.”

    Con-way Truckload, the company’s full-truckload transportation operation, reported:

  • Operating income of $6.9 million, a 44.7 percent decline from $12.4 million. Results included an asset disposition loss of $2.5 million from the sale of 195 tractors as fleet capacity was realigned for market conditions, and a $1.0 million writedown related to the 2007 CFI acquisition;
  • Revenue of $89.8 million was down 34.6 percent compared to $137.4 million. The quarterly revenue reflects the elimination of intercompany revenues of $53.5 million in 2009 and $44.2 million in 2008. The truckload market continued to experience soft demand exacerbated by excess capacity; and
  • Operating ratio on revenue, before intercompany eliminations and exclusive of fuel surcharges, was 94.7 compared to 90.6.
  • Con-way Truckload continued to manage effectively through a difficult market for full-truckload services, Stotlar said. “The volume of shipper bid activity moderated from what we saw in the first quarter, but weak demand and overcapacity kept pricing under pressure,” he said. “Our truckload unit took steps in the quarter to right-size its fleet, selling 195 older tractors and aligning its resource base closer to market demand. Con-way Truckload remains well-positioned as a premium service provider with sound operations, a loyal customer base and excellent cost controls.”