Con-way’s 4Q Income to Decline on Higher Health Costs
Con-way Inc.’s less-than-truckload Con-way Freight unit will report lower fourth-quarter earnings compared with a year ago due to higher healthcare costs, the company said Thursday.
The LTL unit’s projected operating income of $2 million, down from $2.8 million a year earlier, was affected by an $11 million increase in healthcare costs from the previous quarter, the company said.
“The variance in fourth-quarter health care costs was a significant factor in lower operating profits at Con-way Freight,” Con-way Inc. CEO Douglas Stotlar said in a statement.
“While we’re disappointed with these results, we are encouraged by the improvement in pricing and the progress of our operating cost-reduction initiatives begun in the third quarter,” he said.
Con-way introduced new healthcare and benefit packages in the middle of last year that are aimed at reducing costs. The changes took effect at the start of this year.
The company said Con-way Freight’s report fourth-quarter operating revenue will be about $736 million, up 5.7% from a year ago. Weight per day was down 0.5%, while revenue per hundredweight excluding fuel surcharge effects rose 4.9%.
Con-way Inc., ranked No. 6 on the Transport Topics 100 listing of U.S. and Canadian for-hire carriers, will releases its earnings after the market closes on Wednesday, Feb. 2.
