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Con-way 4th Quarter Profit Leaps

February 4, 2015

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Michigan-based trucking and logistics provider Con-way Inc. on Wednesday reported its fourth quarter 2014 profit was more than twice what it was a year earlier.

Net income totaled $24.9 million, or 43 cents per diluted share, compared to fourth quarter 2013 net income of $11.7 million, or 20 cents per diluted share.

Operating income in the fourth quarter was $41.3 million, a 23.8% increase from the $33.4 million earned in the fourth quarter a year ago. Revenue for the fourth quarter was $1.44 billion, up 6.1% compared to $1.36 billion in the previous-year period.

For the full-year 2014, Con-way reported net income of $137 million, or $2.36 per diluted share, compared to 2013 net income of $99.2 million, or $1.73 per diluted share.

Operating income of $268.5 million in 2014 increased 28.5% from the $209 million earned in 2013. Revenue for 2014 was $5.81 billion, a 6.1% increase from $5.47 billion in 2013.

For the fourth quarter of 2014, the company’s less than truckload operation Con-way Freight reported revenue of $897.2 million, a 5.9% increase over last year’s fourth-quarter revenue of $847 million.

Operating income was $36.8 million, a 55.1% increase over the $23.8 million earned in the year-ago period. The higher operating income was due to increased pricing and ongoing revenue management initiatives, according to the company.

Revenue per hundredweight increased 6.1% from the previous-year fourth quarter. Excluding the fuel surcharge, it rose 7.3%. Tonnage per day increased 1.4% compared to the 2013 fourth quarter.

“Con-way Freight achieved growth in revenue and significantly higher operating income compared to last year on the strength of its ongoing revenue management efforts bolstered by a stable demand and pricing environment,” said Douglas W. Stotlar, Con-way’s president and CEO. “The increase in operating income was constrained to some degree by higher expense for workers’ compensation, fleet maintenance and professional services.”

In the final quarter of last year Con-way Truckload had revenue of $152.3 million, a 2.3% decrease compared to last year’s fourth-quarter revenue of $155.8 million. The decline in revenue reflected the effect of lower total loaded miles due to fewer seated tractors and lower fuel surcharge revenue, partially offset by higher revenue per mile, according to the company.

Operating income was $10.7 million, a 20% increase from the $8.9 million earned in last year’s fourth quarter. The higher operating income was mainly attributed to increased yield and lower expenses, including fuel. Empty mile percentage of 10.1% was essentially unchanged from the previous-year fourth quarter.

“Due to strong demand and increased pricing, coupled with declining costs for diesel fuel and other operating expenses, Con-way Truckload delivered a double-digit improvement in operating income for the fourth quarter,” said Stotlar. “The slight decline in revenue was primarily attributable to the industry-wide driver shortage, which continued to impact our ability to seat tractors with qualified drivers. While recruiting and retaining qualified drivers remains a challenge, our improved driver pay package enabled progress in the fourth quarter.”

Finally, Con-way’s Menlo Logistics operation reported revenue of $433.8 million, up 9.2% from the prior-year fourth-quarter revenue of $397.1 million. The higher revenue was primarily attributed to growth in transportation-management services, and to a lesser extent, increased warehouse-management services.

Net revenue of $191.8 million was up slightly compared to $190.6 million in the previous-year fourth quarter. Operating income of $7 million, up from last year’s fourth-quarter operating income of $2.7 million. The higher operating income was primarily attributed to improved margins from warehouse-management services.

“Menlo achieved higher operating income in the fourth quarter as it continued to effectively manage its costs while improving account profitability and service,” Stotlar said. “Following the award and start-up of several unusually large new warehouse projects last year, Menlo’s new business inflows have trended back to historical levels. As a result, our logistics company was able to improve operating efficiency and several key customer performance metrics.”

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