Trucking and logistics parent company, Con-way Inc. has released guidance ahead of posting fourth quarter earnings, with the expectation they will be close to what they were the same time a year ago, 21 cents per share.
“We do not believe that fourth quarter results were indicative of the path we are on, nor do they reflect the overall progress made this year at Con-way Freight,” said Douglas W. Stotlar, Con-way’s president and CEO. “The month of December presented unique challenges, especially at Con-way Freight and Menlo Worldwide Logistics. This distinct set of issues during the month had a disproportionate impact on the fourth quarter.”
“Con-way Freight, the company’s less than truckload unit, had higher-than-expected expense for employee benefits and cargo claims, particularly during December,” it said in a statement. “In addition, operating efficiencies were lower than anticipated, primarily due to adverse weather late in the quarter.”
These factors have reduced its earlier assumptions for fourth quarter 2013 operating income, which is now expected to be approximately $23.8 million, still a 10% increase over the $21.5 million earned in the 2012 fourth quarter.
At Menlo Worldwide Logistics, the company’s global logistics and supply chain management operation, fourth quarter 2013 results were negatively affected by losses at two new warehousing accounts and a customer bankruptcy.
“With respect to the warehousing accounts, Menlo incurred higher-than-anticipated operating expense, particularly in December. This was mostly due to business volumes that fell well below customer projections,” the company said. “Menlo has made significant progress recently with these accounts and is working diligently to address remaining issues. The customer bankruptcy resulted in a write-off of accounts receivable.”
Menlo is now expected to report earnings of approximately $2.7 million for the 2013 fourth quarter, as compared to $8.6 million in the fourth quarter of 2012.
Con-way Truckload, the company’s full-truckload operation, achieved a slight increase in operating income for the 2013 fourth quarter, compared to the previous-year period. “These results included the effects on operations of severe winter weather in the latter part of December, which reduced productivity,” the company said.
Con-way Inc. will release consolidated 2013 fourth-quarter and full-year results after the market close on Feb. 5.