Mark Szakonyi, Daily Content Editor | Dec 02, 2011 10:14AM EST
UTi Worldwide says global economic shifts will cut into earnings in the rest of 2011 after the logistics operator reported an 8 percent gain in net profit in the third quarter.
"We do not see a peak in air freight this year and many clients are planning for a slower environment," said CEO Eric W. Kirchner.
The logistics company's profit rose to $28.5 million on a 5.5 percent year-over-year increase in gross revenue to $1.3 billion. Long Beach, Calif.-based UTi's operating margin grew only slightly in tumultuous air and ocean markets marked by stagnant demand and sharp rate cuts.
The company's net revenue excluding purchased transportation costs rose 9.2 percent year-over-year to $443.4 million in the third quarter.
"Contract logistics and distribution revenue and profit increased by double-digits in the quarter on the strength of new business wins and operational improvement," said Kirchner.
He said the company's fourth quarter performance will likely be hurt by the strengthening of the U.S. dollar, a weakening global economy and the slowdown in Chinese manufacturing caused by the country's New Year celebrations.
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