Con-way Earns $29.4 Million, Doubling Its 2Q 2010 Income
This story appears in the Aug. 15 print edition of Transport Topics. Click here to subscribe today.
Con-way Inc. more than doubled its net income from the second quarter last year, based on strong improvements at both of its trucking units.
The No. 3 carrier on the Transport Topics Top 100 for-hire list earned $29.4 million, or 52 cents a share, on quarterly revenue of $1.35 billion.
In the second quarter last year, it posted net income of $13.9 million, 26 cents a share, on revenue of $1.31 billion.
The company’s Menlo Worldwide Logistics division saw operating income decline by 7%, year-over-year, because of “lower margins on warehouse management services due in part to start-up costs associated with new customer contracts.”
In contrast, Con-way’s less-than-truckload and truckload divisions pumped out more than twice as much operating income than a year ago.
“Margin expansion continued, driven primarily by pricing im-provements and ongoing operating efficiencies. We will maintain our focus on pricing discipline and initiatives to improve margins,” CEO Douglas Stotlar said in the company statement, referring to LTL carrier Con-way Freight.
Quarterly operating ratio at Freight improved to 95.3 from 97.9 a year ago.
At Con-way Truckload, the operating ratio improved to 91.3 from 95.7. Operating ratio measures expenses as a percentage of revenue.
“While Freight remains well below past peak margins, Con-way has done a solid job shrinking to profitability the past two quarters, with incremental margins of 94% in the second quarter. Con-way reported the second-best OR among the public LTLs in the second quarter, albeit 8.8 percentage points below industry leader Old Dominion Freight Line,” stock analysts Edward Wolfe and Scott Group told clients of Wolfe Trahan & Co.
Con-way earned its largest amount of quarterly net income since $31.5 million in the second quarter of 2009.
LTL Con-way Freight increased its revenue per hundredweight before fuel surcharges to $13.87 for the quarter, from $13.09 in the 2010 second quarter.
The average shipment weight grew by 2.1%, year-over-year, while the number of daily shipments declined by 10.1% over the same time. Therefore, total weight shipped per day declined by 8.3%.
At Con-way Truckload, freight revenue per loaded mile rose to $1.542 from $1.48 in the 2010 second quarter.
In contrast to the increase in pricing, utilization declined, as measured by average monthly miles per tractor, which fell to 10,076 from 10,800 in the year-ago quarter.
The average age of the tractor fleet at Con-way Truckload dropped to 2.81 years from 3.51 years in the second quarter of 2010.
