The trucking operation Con-way Inc. has reported 2014 third-quarter net income of $45.6 million, or 78 cents per diluted share. This compares to third-quarter 2013 net income of $30.6 million, or 53 cents per diluted share for the Michigan-headquartered company.
Operating income was $91.4 million, a 35% percent increase from the $67.7 million earned in the third quarter a year ago. Revenue was $1.5 billion compared to $1.4 billion in the previous-year period.
The company’s less-than truckload operation, Con-way Freight, had revenue of $946.3 million, a 5.2% increase from last year's third-quarter revenue of $899.3 million.
Operating income totaled $71.9 million, a 39.4% increase from the $51.6 million earned in the year-ago period. This was due to increased pricing and an improved composition of freight in the network, according to Con-way.
Revenue per hundredweight increased 5.3% from the previous-year third quarter while total tonnage was up 0.2% and tonnage per day declined 0.6% compared to the 2013 third quarter.
"Our LTL company benefited from a solid rate environment supported by firm demand in the quarter," said Douglas W. Stotlar, Con-way's president and CEO. "Our financial performance reflected the ongoing progress of our revenue management and network optimization initiatives as we continued to strategically adjust our business mix to improve yield and create operating leverage."
For the third quarter of 2014, Con-way Truckload reported revenue of $159.2 million, a 1.8% drop compared to last year's third-quarter revenue of $162.2 million. The decline in revenue reflected the effect of lower total loaded miles partially offset by higher revenue per mile, according to Con-way.
Operating income was $10.7 million, a 19.2% increase from the $9 million earned in last year's third quarter.
"Con-way Truckload delivered solid profit improvement in the third quarter, supported by pricing gains and increased operating productivity," Stotlar said. "Network capacity continued to be adversely impacted by the challenging market for drivers. Our recently implemented enhancements to driver pay have helped stabilize the driver turnover rate. However, the number of unseated trucks remains elevated, which hampers our ability to fully meet the capacity needs of our customers."
Con-way’s Menlo Logistics business reported revenue of $443.9 million, up 16.7% from the prior-year third-quarter revenue of $380.5 million. The company said the higher revenue was primarily due to growth in transportation-management services, and to a lesser extent, increased warehouse management revenues
Operating income totaled $7.6 million, a 7% decline from last year's third quarter operating income of $8.2 million. The recent period was adversely affected by increased variable compensation expense and lower margins from warehouse management services, partially offset by improved margins from transportation management services, according to Con-way.
"Menlo grew its revenue and net revenue as new projects won in previous quarters became operational, and current customers expanded Menlo's scope of work," Stolar said. "Despite the year-over-year decline in operating income, sequential improvements continued in 2014. This was primarily due to increased operating efficiencies at a few large warehousing accounts, as well as contract renegotiations which increased margins on a number of transportation management accounts."
Further details are on the Con-way website.