Executive Briefing - Oct. 16
- C.H. Robinson Reports Higher 3Q Profits
- Heartland Net Income Up in 3Q
- OPEC Chief Seeks to Include Non-Members in Cut
- Lower Earnings Expected for Most Trucking Companies
- Overnite Expands West With Purchase of Motor Cargo
- Maryland's M-Tag Now Includes Truckers
- RailAmerica Announces Purchase of StatesRail
- Caterpillar Earnings Down 5%
- Slow Vehicle Production Hurts Delphi Earnings
- Union Pacific Touts New Offerings
- Budget Group Reaffirms Earnings Guidance
- Delta Hikes Cargo Rates
- Heartland Net Income Up in 3Q
C.H. Robinson Reports Higher 3Q Profits
Logistics firm C.H. Robinson Worldwide Inc. (CHRW) reported a net income of $22.6 million or 27 cents per share for the third quarter, compared with 22 cents for the year-ago period. The company said that transportation revenue increased 6.2% during the quarter, mainly from an increase in the company's truck transportation business, including its less-than-truckload business. Total revenue increased 5.6% to $113.2 million.
Looking ahead, C.H. Robinson said in its press release that the fourth quarter of 2001 will likely be difficult because of the slow economy, which has kept customers' freight volumes down. Transport Topics
(Click here for the full press release.)
Heartland Net Income Up in 3Q
Truckload carrier Heartland Express Inc. (HTLD) said Tuesday that its net income for the third quarter increased 9.8% to 9.2 million or 29 cents per share, from 26 cents in the same period last year. The Coralville, Iowa-based company, ranked No. 55 in the 2000-2001 Transport Topics 100 list, also said that revenue increased 8.5% to $73.9 million.
Heartland said it took delivery of 100 tractors and 350 trailers during the quarter and saw the percentage of miles generated by company-owned tractors increase to 68% from 65%. Transport Topics
(Click here for the full press release.)
OPEC Chief Seeks to Include Non-Members in Cut
The secretary-general of the Organization of the Petroleum Exporting Countries is thinking about meeting with independent oil producers to negotiate an agreement on cutting oil production, Bloomberg reported.Ali Rodriguez is hoping that oil-producing nations will work together to cut production and boost prices that have sagged since the Sept. 11 attacks on the United States.
OPEC’s goal, Bloomberg said, is to keep oil prices in a range of $22 to $28 per barrel, something it has been unable to do as prices have declined steadily for four weeks.
The price of crude oil is vitally important to the trucking industry because of its impact on the price of diesel fuel and gasoline. Transport Topics
Lower Earnings Expected for Most Trucking Companies
The weak economy is expected to hit trucking companies hard this earnings season, many analysts believe.Already a having a tough go of it in 2001, the threat of terrorism after the Sept. 11 attacks has forced companies to spend more on security measures in the short term – and they may face even greater challenges in the long run, the Wall Street Journal said.
Bob Costello, an economist with the American Trucking Associations, said that many believed the disruption in airfreight following Sept. 11 attacks would be a boon for trucking. But for an industry that already moves 87% of all cargo in the U.S. – the slice of the pie held by air carriers is too small to make an impact, the Journal reported.
Many companies have already warned of lower-than-expected earnings including Consolidated Freightways Corp. and Yellow Corp., according to the Journal. Others like J.B. Hunt Transportation Services Inc. have reported profits well below last year. Transport Topics
Overnite Expands West With Purchase of Motor Cargo
Overnite Holding Inc., the trucking unit of Union Pacific Corp. (UNP), said late Monday it will buy Motor Cargo Industries Inc. (CRGO) for about $80 million.
Overnite, ranked No. 19 in the 2000-2001 Transport Topics 100 list, provides regional, inter-regional and long-haul service to 32 states east of the Rockies. The purchase of Salt Lake City-based Motor Cargo, ranked No. 89, will allow Overnite to expand its reach further west.
The transaction provides for a first-step exchange offer for all Motor Cargo shares, in which shareholders can tender their shares for cash or shares of Union Pacific stock. Hal Tate, chief executive officer of Motor Cargo, has already committed to taking shares of Union Pacific stock.
"We are very pleased to have Motor Cargo as part of our family," said Leo Suggs, chairman and CEO of Overnite.
In August, Overnite reported a net income for the second quarter of $12.6 million. Transport Topics
(Click here for the full press release.)
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Maryland's M-Tag Now Includes Truckers
Operators of tractor-trailers and other vehicles with three or more axles are will now be able to use M-Tag, Maryland's electronic toll collection program, the Associated Press reported.The automatic system can help truck drivers avoid delays on highway tolls in Delaware, Massachusetts, New Jersey, New York, Pennsylvania and West Virginia, all of which have reciprocal arrangements with Maryland.
M-Tag users can receive a discount on tolls, but the trips expire after 60 days. The program will also allow travelers to pay in advance for full-price tolls, which never expire.
Maryland officials said they expect M-Tag to be used on nearly every toll in the state by the end of the year. Transport Topics
RailAmerica Announces Purchase of StatesRail
Railroad agglomerator RailAmerica announced Monday that is has entered into an agreement to acquire the stock of StatesRail for $90 million in two separate transactions.The purchase includes $70 million in cash and assumption of debt and about $20 million in Rail America stock, the JoC said. The companies expect the deal to be closed pending regulatory approval.
StatesRail is a private group of railroads that owns seven freight railroads in 11 different states. Trucks compete directly with rail for various cargoes. Transport Topics
Caterpillar Earnings Down 5%
Higher sales and even higher operating expenses and inefficiencies led the world’s largest maker of construction equipment to a third quarter that was 5% worse than 2000.Caterpillar Inc. (CAT) had a net income of $205 million, or 59 cents per share. In 2000, those figures were $216 million and 62 cents per share. Total revenue was up almost 6% to $5.06 billion.
"Our financial performance in the third quarter continued to reflect the benefits of diversification, however several key industries we serve -- especially truck engines -- remained extremely weak," said Chairman and Chief Executive Officer Glen Barton.
The company claimed profits of $11 million in the third quarter – down 5% from 2000. Looking ahead to the fourth quarter, Caterpillar said it thought that results for the full year would be flat with 2000. Transport Topics
(Click here for the full press release.)
Slow Vehicle Production Hurts Delphi Earnings
Delphi Automotive Systems Corp. (DPH), one of the largest makers of vehicle parts, reported a net income for the third quarter of $26 million, or 5 cents per share, compared with 26 cents per share last year.
The Troy, Mich.-based company said in a press release that the results were in line with estimates. Revenues for the quarter totaled $6.2 billion, down 6% from the year-earlier period.
Chief Executive Officer Alan Dawes said continued softening of vehicle production in North America, Europe and South America, and weak global aftermarket sales were to blame for the lower earnings. Delphi eliminated 3,700 positions during the quarter -- the cuts had been previously announced.
Looking ahead, Delphi warned fourth-quarter earnings of 5 to 15 cents per share will be below current forecasts. Transport Topics
(Click here for the full press release.)
Union Pacific Touts New Offerings
As the economy slows and border traffic snarls, the nation’s largest railroad has thundered ahead with direct service between the U.S. and Canada.Union Pacific Corp. (UNP) has entered into joint efforts with Canadian Pacific Railway Co. to provide rail service between western Canada and central California. The service has increased in traffic 31% from when it was introduced two years ago.
Trucks often compete with railroads for a variety of shipments.
The Sept. 11 terrorist attacks, and resulting increases in security have stalled many truck shipments at checkpoints along the U.S.-Canada border. Rail shipments have avoided such delays because their payloads are precleared by customs. Transport Topics
Budget Group Reaffirms Earnings Guidance
Budget Group Inc. announced today that it expects to meet its announced earnings guidance for the third quarter of 2001.Despite the events of Sept. 11, and the resulting slowdown in air travel, Budget Group, one of the largest of the vehicle leasing companies, anticipates earnings per share to be a the low end of the $1.24 to $1.12 per share range, the company said. Third quarter earnings in 2000 were $0.30 per share.
The company credits the fact that half of its domestic revenue comes from local car and truck rental operations with keeping it more profitable than other vehicle rental companies during the airline slowdown.
"Results throughout the third quarter were strong prior to September 11,” said Sandy Miller, chairman and chief executive officer. “Although business remains down at our airport locations, our swift fleet reductions, other asset management efforts and con-tinuing cost improvement measures will enable us to deliver third quarter earnings within the range of our previously announced guidance.” Transport Topics
(Click here for the full press release.)
Delta Hikes Cargo Rates
In an effort to offset increasing costs, Delta Air Lines (DAL) has raised its cargo rate and cut several trans-Pacific flights, the Journal of Commerce said.Delta has not labeled the new fee a security surcharge, as many other carriers have done, instead it is just called an increase on its existing fee on U.S. export shipments by seven cents a kilogram to a total of 22 cents. The surcharge from Europe was also boosted by .08 Euro per kilogram to a total of 0.25 euros.
The airline will also set minimum surcharges of $20 for U.S. exports of standard freight and $6.45 for its express delivery service, the JoC reported.
The new fees will take effect immediately and match the charges placed on cargo by Air France (3112-PAR), Delta’s partner in SkyTeam cargo. Transport Topics
