Logistics provider UTi Worldwide saw its net profit dive 67 percent in the three months ending July 31 but said the market for shipping and logistics services is shoring up heading into the fall.
"The environment appears to be more stable than we have seen in some time, albeit at levels that are lower than the prior year," said UTi CEO Eric W. Kirchner.
Hit by declining shipping volume, the Long Beach, Calif.--based company UTi Worldwide, saw gross revenue drop 33 percent to $840.5 million in its fiscal second quarter and the operating profit fell 49 percent to $22.4 million. UTi's net profit of $11.8 million was down from $33.7 million in the same quarter last year. However, cash flow from operations increased 44 percent to $51.5 million.
"While I am not satisfied with the quarter's results, we are on track with our sales initiatives and transformation efforts, and they are expected to drive improvement in the future,” said Kirchner, “Results in the quarter continued to be impacted by weak economic and industry conditions. But the pace of volume declines moderated throughout the quarter, primarily due to seasonal factors."
Kirchner attributed the revenue decline in the quarter to continued declines in forwarding and logistics volumes as well as to currency fluctuations. On an organic, constant currency basis, adjusted net revenue declined 11 percent in the 2010 second quarter compared with the second quarter a year ago, he said.
UTi's operating expenses in the second quarter of fiscal 2010, excluding purchased transportation costs, were $317.0 million, or 15 percent lower than its operating expenses in the same quarter last year. The decline reflected lower costs associated with the declining volumes, currency fluctuations, and benefits achieved through cost reduction efforts.
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