Lower volume in the intermodal segment would have reduced Pacer's profit in the fourth quarter anyway, but an impairment charge due to stock market losses pulled the asset-light transportation provider into a $65.1 million loss.
With revenue down $36.5 million or 7 percent to $503.7 million, Pacer was also hit with an $87.9 million pre-tax non-cash goodwill impairment charge related to the company's logistics segment.
Intermodal segment income from operations decreased $27.3 million from the 2007 quarter on overall volume declines of 12.1 percent reflecting the U.S. and global economic downturn, made much worse for Pacer by the automotive industry's near collapse.
Net income for the fourth quarter of 2007 was $20.6 million. This year without the impairment charge, it would have been $8.2 million.
"We are taking immediate steps to put our costs in line with current business levels by implementing strict spending controls on all non-customer related activities, and we recently completed a work force reduction," said Michael E. Uremovich, chairman and CEO.
Other steps to meet the challenge of the economy include increasing local trucking capacity; improving logistics services performance; and full implementation of software to improve process efficiencies and reduce costs.