YELLOW CORP. SURVIVES RATE WAR, TURNS PROFIT

YELLOW CORP. SURVIVES RATE WAR, TURNS PROFIT

Yellow Corp. posted a narrow $1.0 million second-quarter profit Thursday, doing as well as it had hoped it could in the face of soft freight levels.

The company's profit, which came to 4 cents a share, was an improvement over the loss of $21.9 million, or 78 cents a share, it posted in the 1994 second quarter, when a Teamsters strike hit Yellow Freight System and Preston Trucking Co., its two largest subsidiaries.Revenue of $773.8 million in the quarter was up 30.1 percent over the strike-impacted $592.2 million in the same period a year earlier.

The company warned analysts to expect either a narrow loss or a small profit in the quarter due to the trucking rate war, which has hit the national less-than-truckload industry particularly hard. Yellow Freight is the nation's largest LTL carrier. However, it managed to report a slight profit in the quarter, with a ratio of operating expenses to revenue of 98.7 percent. Preston had a $1.3 million operating loss.

"Widespread price discounting in the second quarter, compounded by continued slowing in the economy, impacted significantly the company's results," said George E. Powell III, president and chief executive of the Overland Park, Kan., holding company. "In addition, union wage and benefit increases effective April 1 impacted expense levels."

ABF FREIGHT LEADS

ARKANSAS BEST TO PROFIT

Arkansas Best Corp. Thursday reported a modest but encouraging $1.7 million profit, or 3 cents a share, for the second quarter.

The company suffered a $3.4 million loss in the year-earlier period when a 24-day Teamsters strike sidelined ABF Freight Systems Inc., its largest subsidiary.

"ABF's June operations improved considerably from April and May results which allowed the company to report earnings at the upper end of our expectations for the quarter," said Robert A. Young III, president and chief executive of the Fort Smith, Ark., company. Revenue rose to $312.1 million

from $210.8 million a year earlier.

The turnaround at ABF was even greater than in the company as a whole.

The national LTL carrier, which has seen fierce price competition in the face of soft freight levels, had a operating profit of $5.6 million, compared with a $4.2 million operating loss a year earlier. Revenue rose to $240 million from $173.8 million. Its operating ratio was 97.8 percent, compared with 102.7 percent a year earlier.

LANDSTAR REGISTERS

2ND-QUARTER RECORD

Landstar System posted record second-quarter net income of $7.8 million, or 61 cents a share, up 18 percent from the $6.6 million, or 51 cents a share, posted a year earlier.

Landstar, the nation's third-largest truckload carrier, used its acquisition strategy and its owner operators to achieve the record results, the Shelton, Conn.-based company said.

The company posted record second-quarter revenue of $308.1 million, up 23 percent from the $250.2 million revenue of a year earlier. That increase included $51 million from three new subsidiaries. But the three additions - Landstar ITCO Inc., Landstar Express America Inc. and Landstar T.L.C. Inc. - added only $500,000 in operating income.

The almost exclusive use of owner-operators, which reduces fixed costs, is one of the reasons Landstar has survived well during the downturn in the trucking industry, said Jeff Crowe, Landstar's chairman and chief executive.

OLD DOMINION FREIGHT

REPORTS DECLINE IN NET

Old Dominion Freight Line Inc., one of the super-regional nonunion less- than-truckload carriers that thrived during last April's Teamsters strike, reported reduced second-quarter earnings Thursday.

Net income was $2.0 million, or 24 cents a share, compared with $3.5 million, or 42 cents a share, a year earlier.

Revenue was $60.4 million, down from $66 million.

The operating ratio at the High Point, N.C., carrier rose to 94.1 percent

from 90.9 percent a year earlier.

"Results for the second quarter reflected the impact of a slowing economy that lowered expectations throughout the transportation industry," said Earl E. Congdon, chairman and chief executive. But he said the company would continue expansion plans that saw it open service centers in seven states in the second quarter. It plans to open service centers in St. Louis, Kansas City and Appleton/Green Bay.

The company primarily serves regional lanes in the Southeast and Northeast, as well as lanes connecting the Southeast to the Northeast, Midwest and California.

COVENANT ANNOUNCES

9 PERCENT INCREASE IN INCOME

Covenant Transport Inc. Thursday reported increased earnings and revenue, which bucked the industry trends but failed to live up to earlier expectations at the company.

Net income for the quarter was $2.1 million, or 16 cents a share, up 9 percent from $1.9 million, or 19 cents a share, a year earlier, when there were fewer shares outstanding.

Revenue increased 46 percent to $44.6 million from $30.5 million.