Overnite, Teamsters Spin Financials
July 26, 2000
Overnite Transportation's second-quarter financial results provided public relations fodder for both the less-than-truckload company and the Teamsters union in their ongoing battle.
Overnite announced today that it netted its best 90-day period in the last six years. The Teamsters union, however, claimed that its nine-month-old strike against the company has resulted in Overnite's worst six-month results since 1997.
Overnite reports it had net income of $12.6 million in the second quarter, a 9.3-percent increase over the same period last year and the highest income for any quarter since 1994.
The company had $283.4 million of revenue for the quarter, a 3.7 percent increase over the same period in 1999. Operating income also rose, to $16.8 million from $14.9 million in 1999, a 12.9 percent increase, while its operating ratio improved from 94.1 to 94.5.
The second-quarter numbers continue the operating income turnaround achieved since the fourth quarter $13.7 million loss and the first quarter's $500,000 operating income, which resulted largely from extra expenses incurred because of the Teamsters strike.
Overnite CEO Leo Suggs reported that deliveries improved 11 percent from the same period last year, on-time service has been consistently at 98 percent and productivity is running at an all-time high, despite the Teamsters unfair labor practice action that started in late October.
The Teamsters issued a release focusing on Overnite's six-month results, which are not as rosy. Overnite reported six-month net income of $14.9 million on revenue of $552.4 million, compared to net income of $20.1 million on revenue of $525.2 million for the same period last year.
The Teamsters claim that Overnite's revenue increase was due to a 4.9 percent rate increase implemented last September and a fuel surcharge of 3 to 7 percent. The union also compares Overnite's increase in profits to other less-than-truckload competitors. At the Teamster represented segments of ABF, profits increased 40 percent in the second quarter, according to the union, and at the Teamster represented segments of Yellow Freight and Roadway Express, profits increased 29 percent in the second quarter. At non-union American Freightways the union says, profits increased 42.1 percent.