USFreightways Corp. reported revenue for the third quarter ended Sept. 28, 2002 of $634.5 million compared to $618.6 million reported for the third quarter last year.
Earnings from the company's core operations (less-than-truckload, truckload, logistics and corporate) were $13.4 million or 49 cents diluted earnings per share, compared to last year's third quarter earnings of $16.0 million, equivalent to 59 cents diluted earnings per share. The company's net income, including its non-core freight forwarding business, amounted to $5.3 million, equivalent to 19 cents per diluted earnings per share compared to last year's third quarter net income of $9.7 million equivalent to 36 cents diluted earnings per share.
Earlier this month, the company announced that it has an agreement to sell its non-core freight forwarding business (USF Worldwide Inc. and USF Worldwide Logistics Ltd.). The transaction is expected to close on or before Oct. 31, 2002.
Net income was negatively impacted by results in the non-core freight forwarding segment which showed an after tax loss of $8.1 million. Included in the freight forwarding loss is a charge of $4.7 million relating to contractual payments paid to former owners of the UK business. Upon the closing of the sale of the freight-forwarding segment in the fourth quarter, the company expects to take an after tax charge of $10 -12 million.
Samuel K. Skinner, chairman, president and CEO of USFreightways, commented, "The results of the third quarter for our core operations are somewhat encouraging. During July and August, tonnage and revenue at our regional LTL companies were up only slightly over last year as we continue to be affected by the current sluggish economy. However, the LTL business showed healthy volume increases following the close of Consolidated Freightways on Sept. 2nd as we picked up a portion of its revenue."
Third quarter revenue in the LTL group amounted to $483.3 million, a 4.7% increase from last year's third quarter revenue of $461.4 million. Revenue in September, on the other hand, increased 8.0% over September 2001. "Although we cannot definitively determine the amount of all revenue increases, we estimate that about three-quarters of this increase is attributable to CF's closure," Skinner said.
Fuel surcharges, which are included in the reported revenue, declined by about 0.6%, as a percent of revenue in the quarter, compared to last year's third quarter. As a result, total trucking group revenue before fuel surcharges increased approximately 5.3% in this year's quarter compared to last year instead of the 4.7% reported increase.
Operating earnings for the LTL group were $30.6 million in the quarter, essentially flat compared with the $30.7 million for the same period of 2001. The LTL group's operating ratio improved to 93.7 from 94.0 in the second quarter of this year and was higher than the 93.3 for the third quarter of 2001.
Skinner concluded, "With our exit from the freight forwarding segment, management's concentration can now be tightly focused on the growth and profitability of our core businesses. Challenges remain, due mainly to the persistent sluggishness of the economy. September's volumes were mildly encouraging, however, and we would expect core earnings for the fourth quarter to be comparable or just slightly higher than last year."
USFreightways Corp. provides comprehensive supply chain management services, including high-value next-day, regional and national LTL transportation, logistics, and premium regional and national truckload transportation.
Earnings from the company's core operations (less-than-truckload, truckload, logistics and corporate) were $13.4 million or 49 cents diluted earnings per share, compared to last year's third quarter earnings of $16.0 million, equivalent to 59 cents diluted earnings per share. The company's net income, including its non-core freight forwarding business, amounted to $5.3 million, equivalent to 19 cents per diluted earnings per share compared to last year's third quarter net income of $9.7 million equivalent to 36 cents diluted earnings per share.
Earlier this month, the company announced that it has an agreement to sell its non-core freight forwarding business (USF Worldwide Inc. and USF Worldwide Logistics Ltd.). The transaction is expected to close on or before Oct. 31, 2002.
Net income was negatively impacted by results in the non-core freight forwarding segment which showed an after tax loss of $8.1 million. Included in the freight forwarding loss is a charge of $4.7 million relating to contractual payments paid to former owners of the UK business. Upon the closing of the sale of the freight-forwarding segment in the fourth quarter, the company expects to take an after tax charge of $10 -12 million.
Samuel K. Skinner, chairman, president and CEO of USFreightways, commented, "The results of the third quarter for our core operations are somewhat encouraging. During July and August, tonnage and revenue at our regional LTL companies were up only slightly over last year as we continue to be affected by the current sluggish economy. However, the LTL business showed healthy volume increases following the close of Consolidated Freightways on Sept. 2nd as we picked up a portion of its revenue."
Third quarter revenue in the LTL group amounted to $483.3 million, a 4.7% increase from last year's third quarter revenue of $461.4 million. Revenue in September, on the other hand, increased 8.0% over September 2001. "Although we cannot definitively determine the amount of all revenue increases, we estimate that about three-quarters of this increase is attributable to CF's closure," Skinner said.
Fuel surcharges, which are included in the reported revenue, declined by about 0.6%, as a percent of revenue in the quarter, compared to last year's third quarter. As a result, total trucking group revenue before fuel surcharges increased approximately 5.3% in this year's quarter compared to last year instead of the 4.7% reported increase.
Operating earnings for the LTL group were $30.6 million in the quarter, essentially flat compared with the $30.7 million for the same period of 2001. The LTL group's operating ratio improved to 93.7 from 94.0 in the second quarter of this year and was higher than the 93.3 for the third quarter of 2001.
Skinner concluded, "With our exit from the freight forwarding segment, management's concentration can now be tightly focused on the growth and profitability of our core businesses. Challenges remain, due mainly to the persistent sluggishness of the economy. September's volumes were mildly encouraging, however, and we would expect core earnings for the fourth quarter to be comparable or just slightly higher than last year."
USFreightways Corp. provides comprehensive supply chain management services, including high-value next-day, regional and national LTL transportation, logistics, and premium regional and national truckload transportation.
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