UTi Worldwide reports higher 3Q net income

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UTi Worldwide Inc. on Thursday, Dec. 2, said revenues for its fiscal 2011 third quarter ended Oct. 31 were $1,198.4 million, an increase of 24 percent from $967.2 million. Net revenues (revenues minus purchased transportation costs) were $406.1 million, an increase of 12 percent from $361.5 million. Operating income was $43.9 million, an increase of 40 percent from $31.4 million. Net income was $26.4 million compared to $18.0 million.

“Our improved third-quarter performance was the result of higher volumes and greater operating efficiency, partially offset by lower yields,” said Eric W. Kirchner, chief executive officer of UTi Worldwide, based in Long Beach, Calif. “Volume growth, while still ahead of last year, moderated in the third quarter.”

Kirchner said yield pressure also showed signs of moderation in the third quarter. “Carrier spot rates were slightly more favorable as a result of declining demand and available capacity, and we continued to adjust our pricing in response to market conditions,” he said. :While this is encouraging, the rate of yield improvement may not be sufficient to offset anticipated volume weakness in the fourth quarter.”

Kirchner said the company’s contract logistics and distribution business reported solid revenue growth and operating margins. “Existing business was strong in consumer and retail sectors, partially offset by slowing volumes in automotive and technology,” he said.