EGL Says Merger Causes Lower Earnings, Layoffs

Eagle Global Logistics, the strongly profitable Houston-based freight forwarder owned by EGL Inc. (EAGL), last week acknowledged difficulties that will cause it to take about $90 million in pre-tax charges against earnings and to lay off 300 employees.

Most of the charges are related to the company’s October acquisition of Circle International Group, but $5 million will go toward funding a legal battle in Philadelphia against the federal government and former employees who charge the company with discriminatory employment practices.

The $90 million in charges, valued at $63 million after taxes, is being spread out over two quarters — the fourth from last year and the first for 2001.

In a Jan. 22 statement, the company estimated fourth-quarter earnings would be about 36 cents a share, or about 5 cents below the Wall Street consensus estimate. Quarterly revenue is estimated at $510 million by the company.

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