Trucking and logistics giant Con-way expects fourth-quarter earnings to be flat with year-ago results, citing problems at less-than-truckload carrier Con-way Freight and Menlo Worldwide Logistics.
Con-way on Thursday said earnings should be close to 21 cents per share. Analysts expected per share earnings in the high 30-cent range, according to the Wall Street Journal.
The $5.6 billion company said employee benefit costs and cargo claims at Con-way Freight cut into that unit’s quarterly operating profits, which are still expected to climb 10 percent to $23.8 million.
At Menlo Worldwide Logistics, however, losses at two new warehousing accounts and a customer bankruptcy contributed to a 68 percent decline in profits to approximately $2.7 million, Con-way said today.
Con-way Truckload is en route to a slight increase in operating profit in the fourth quarter, the company said, despite the impact of severe winter weather on productivity in late December.
“The month of December presented unique challenges, especially at Con-way Freight and Menlo Worldwide Logistics,” Douglas W. Stotlar, president and CEO of Con-way, said in a statement.
“We do not believe that fourth quarter results were indicative of the path we are on, nor do they reflect the overall progress made this year at Con-way Freight,” said Douglas W. Stotlar.
“Looking forward, we remain focused on our strategic initiatives that are designed to continuously improve operating efficiency as we position the company for increased profitability and long-term success,” he said.
Satish Jindel, president of SJ Consulting Group, said Con-way needs to double down on those initiatives and increase its focus on operations. “This company has been a yo-yo the past few years,” he said.
Con-way had reported progress with its “strategic initiatives” in recent quarters, especially at Con-way Freight, increasing profits year-over-year though quarterly results have varied.
Net profit for the company as a whole was up 20.8 percent in the third quarter year-over-year, 2.6 percent in the second quarter, and down 45.4 percent in the first quarter.
In the fourth quarter of 2012, net profit dropped 48.6 percent to $11.8 million, though profit for the full year increased 18.2 percent to $104.5 million.
Con-way lost $110.9 million in 2009 in the wake of the Great Recession and an LTL price war, but it returned to the black in 2010 with a $4 million profit and an $88.4 million profit in 2011.