A.M. Executive Briefing - July 20

DaimlerChrysler Continues Spending Spree, Buys Up Detroit Diesel

DaimlerChrysler has held been a shareholder in Detroit Diesel since 1993, currently holding 21.3% of that company's stock. DaimlerChrysler will purchase the remaining 78.7% for $23 per share, a total sale price of $423 million. Penske Corp. will also tender its 48.6% of Detroit Diesel's shares to DaimlerChrysler.

By acquiring Detroit Diesel, which makes engines ranging from 22 to 10,000 horsepower, and Western Star, DaimlerChrysler strengthens its position in the global truck market. Transport Topics

Truck Parts Makers Set Stock Buybacks

ArvinMeritor, which makes heavy-duty truck axles plus shocks and exhaust systems and was created just this month through a merger, said it would buy back as much as $100 million in shares or 9.4% of those outstanding, Bloomberg reported.

Hayes Lemmerz, which makes wheels and other equipment, announced it will repurchase up to $30 million worth, with Chairman and Chief Executive Officer Ron Cucuz saying that "our stock is at a historical low and we believe that the repurchase program is a good investment of available funds." Transport Topics

Truck Maker Volvo AB Shows Profit Drop on Weak U.S. Market

Suppliers of various types of trucking equipment, from parts to fully assembled rigs, have been unveiling earnings hits because of slower and in some cases falling sales from North America.

Volvo also said it cut 3,000 jobs from its North American workforce in the second quarter, Bloomberg noted. Transport Topics

UPS Has Record Second Quarter

"More than anything, we're pleased by the company's growth across all segments," said CEO Jim Kelly in the announcement. "Customers are rewarding us for superior service and the industry's broadest product portfolio."

In the second quarter, UPS's revenues increased 11% and net income 18.2% to 60 cents per diluted share. Driving the increase was a 6.7% rise in the number of packages delivered per day worldwide to 13.2 million. Transport Topics

High Driver Turnover Affects USA Truck's Second Quarter

USA Truck experienced record operating revenues for the quarter with a 52.7% increase. At the same time, net income decreased 83.5%.

Powell said in the announcement that a survey of drivers showed many left USA Truck for higher pay elsewhere. In response, USA Truck announced it will increase its pay scale in October to be more in line with that of the top carriers. Transport Topics

Covenant Says Net Drops on Tractor Use, Fuel; Expands Stock Buyback

David R. Parker, chairman and chief executive officer, said while high fuel prices played a role, "the major area of disappointment…was our tractor utilization, or miles per tractor." After adding about 1,000 tractors since July 1 of last year, and "with the econ-omy slowing in response to the Federal Reserve's interest rate hikes, our level of good quality freight fell short of the capacity we had available."

But Parker said Covenant was able to boost rates and driver pay, and by June 30 all its tractors had drivers.

The company also unveiled a second stock buyback program. After the earlier one bought back nearly a million shares through July 15, Covenant will buy up to another 500,000 in the open market or negotiated deals. Transport Topics

Arkansas Best Reports Highest Quarterly Net Income In History

The net income was the highest net income for a single quarter in the company's history.

ABF and G.I. Trucking, as well as other subsidiaries Treadco Inc. and Clipper, all experi-enced increases in revenue for the second quarter. Transport Topics

Expanding Old Dominion Scores 7.8% Per Share Earning Increase in Second Quarter

Net income increased 7.3% to 4,576,000, while earnings per share increased 7.8% to 55 cents.

This year, Old Dominion has increased its full-state coverage to 21 states east of the Mississippi River, recently adding Illinois, Indiana, Ohio, Kentucky and West Virginia. Transport Topics

Housing, Labor Data In Line With Slowing Economy

This follows a year in which the Federal Reserve pushed short-term interest rates up by about two percentage points, and that in turn pushed up longer-term lending costs such as on home mortgage loans.

Separately, the Labor Department reported that weekly unemployment insurance claims declined a little in the latest week, but that the four-week average of newly filed claims for jobless benefits has now edged up to its highest level in more than a year. Transport Topics

Knight Transportation Report Second Quarter Earnings

Operating revenue increased 40.8% for the quarter, while net income rose 24% to $.31 per diluted share. The company also said rising fuel costs had a negative impact of approximately $0.03 per diluted share for the quarter. Transport Topics

Freight Manager Hub Group Cites Accelerating Growth

Hub said it earned 30 cents a share in the period, compared with 34 cents a year ago, but that adjusted to remove goodwill amortization it earned 41 cents.

Hub handles a broad range of transport services for shippers, including intermodal, truck-load, consolidated loads, railcar, airfreight, international and related logistics and distribution services. Transport Topics

Gas Prices Cut Into Consumer Spending, Poll Says

The poll also found that 61% think the economy is in good shape, and that a majority believe it is a good time for a major purchase such as a house or car.

However, the story said the gasoline prices appear to be hitting the young and poor hardest, and that a majority of those earning less than $20,000 a year say higher pump prices are reducing their spending on other things. Transport Topics