Pacer International, the Dublin, Ohio-based light-asset freight transportation and logistics services provider, overcame weak revenue to post third quarter profit of $2.8 million, up 155 percent from $1.7 million a year earlier.
Revenue declined 28 percent year-over-year to $250.0 million, largely because of the company's revised cross-border agreement with Union Pacific, under which Pacer no longer collects and passes through rail transportation costs to automotive intermediaries servicing the business between the U.S. and Mexico.
Pacer’s intermodal segment reported operating income of $11.3 million in the third quarter, up 2.6 percent from the same period last year, while revenue slid 33.6 percent to $193.3 million. The logistics division posted an operating loss of $1.7 million in the quarter, an improvement over the $2.3 million operating loss of a year earlier. Revenue for the logistics division dipped 1.9 percent to $57 million.
“We continue to see improved operating results in our intermodal segment from the efforts we have taken to further lower our network costs through better management of our empty miles, network flows and box utilization,” Chairman and CEO Daniel W. Avramovich said in a written statement. “Our logistics segment, while not yet profitable, has improved significantly over the last four quarters.”
In the intermodal segment, the company “appears to be gaining some traction” on their improvement initiatives thanks to the “laser-like focus” of Paul Svindland, Pacer’s chief operations officer, according to Stifel Transportation & Logistics Research Group.
The logistics business, Stifel noted, continued to refocus in the quarter on providing integrated service from inland points in Asia to inland points in North America. “The idea is elegant, but so far the company has been unable to break even in logistics and has pushed their breakeven target for this business at least out into 2014,” the research firm said.
In the first nine months of 2013, Pacer’s net income was $6 million versus $2.1 million in the same period last year. Revenue from January to September totaled $720.7 million, down from $1.1 billion.