Domestic gains drive Airborne earnings

Domestic gains drive Airborne earnings

Airborne Inc. earned $3.8 million during the second quarter, up from $457,000 in the same period a year ago. Revenue totaled $827 million, up from $812 million.

The Seattle-based company, which does business as Airborne Express, attributed the earnings growth to increased domestic shipments and improved operating efficiency.

Airborne said revenue from increased domestic shipments offset declining international activity during the second quarter. Operating earnings totaled $12.4 million, up from $9.1 million a year ago, primarily due to a $2.2 million drop in interest expense.

Domestic revenue increased 3.1 percent to $743 million, compared to $721 million, while international revenue fell 7.6 percent to $83.7 million, down from $90.5 million in the second quarter of 2002.

Total shipment volume increased to 87.3 million shipments, up from 85.6 million, with domestic shipments up 2.2 percent due to strong growth in its ground service, Airborne said. Average revenue per domestic shipment edged up 1.4 percent to $8.64, compared to $8.53 a year ago. Total international volume fell 6.3 percent, while revenue per shipment declined 1.4 percent to $58.58.

Airborne, which acts as a freight forwarder on international shipments, said its international segment had an operating loss of $155,000 in the second quarter, but said this was an improvement over its performance in the first quarter and in the second quarter of last year.

Pending shareholder approval of Deutsche Post World Net's proposed $1.05 billion acquisition of Airborne's ground operations network at their annual meeting on Aug. 14, this will be the last quarterly report for the package delivery company, whose roots date back to 1946. The company took its present form in 1968 with the merger of Airborne, then a California-based company, and Seattle-based Pacific Air Freight.

Deutsche Post plans to combine Airborne's ground network with that of Fort Lauderdale-based DHL Worldwide Express, a subsidiary of Brussels-based DHL International. The combination of Airborne's U.S. network and customer base with DHL's global network would make DHL a much stronger competitor to FedEx Corp. and United Parcel Service, which dominate the U.S. express market.

The plan calls for Airborne's air network, ABX Air, to be spun off into a separate U.S.-owned company. Just like Astar Air Cargo, formerly DHL Airways, it would primarily serve DHL, although it would seek other customers.

The fate of the company's international segment post-merger has not yet been announced.