Pacer announces lower 2Q net income

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Pacer International Inc. an asset-light North American freight transportation and logistics services provider, said Thursday, July 26, that total intermodal revenue for the three-month period ended June 30 improved $2.9 million or 1.0 percent. Excluding the impact in volume from an ocean carrier customer of $22.9 million in the second quarter of 2011, intermodal revenues grew by 9.2 percent. Logistics revenues declined to $61.8 million. In total, revenues decreased by 4.7% to $368.3 million.

Income from operations decreased by $5.0 million, and income from operations in the intermodal segment decreased $3.8 million to $9.4 million; excluding the reduced volume from the ocean carrier customer, intermodal income from operations decreased by $1.3 million. Net income decreased $2.9 million to $1.3 million.

“Our second quarter proved to be a very challenging quarter for us,” said John Hafferty, chief financial officer. “While our intermodal revenues grew at 9.2 percent and our domestic volumes in this segment grew by 17.0 percent, we were unable to take full advantage of this growth with margin and profitability improvement. Our logistics segment operating loss, excluding severance, improved sequentially by $0.9 million, and we have taken several actions in the quarter to improve the financial performance of this segment. However, the global freight forwarding market continues to remain quite sluggish.”

Dan Avramovich, chief executive officer, said Pacer was pleased with growth in revenue in its intermodal segment, as its domestic volumes grew by double digits for the quarter. “However, we were disappointed with the overall margins in this segment, as we were unable to secure the incremental pricing needed from the railroads to offset our costs,” Avramovich said. “We are committed to continuing our drive for operational excellence in all of our businesses to enhance our competitiveness and improve our margins.

Year to date, total intermodal revenue improved $8.3 million or 1.4 percent. Excluding the impact from the ocean carrier customer of $49.1 million in the first half of 2011, intermodal revenues grew by 10.7 percent. Logistics revenues declined by 23.9 percent to $122.9 million, and total revenues decreased by 4.1 percent to $714.2 million.

Income from operations decreased by $8.9 million, and income from operations in the intermodal segment decreased $4.0 million to $17.6 million. Excluding the reduced volume from the ocean carrier customer, intermodal income from operations grew year over year by $1.2 million or 7.3 percent. Net income decreased $5.2 million to $1.0 million.