News Briefs - April 28
The Latest Headlines:
- Arkansas Best Sells Wingfoot to Goodyear for $71.3M
- Smithway’s Loss Narrows in 1Q
- Surplus of Containers in N.J. Could Be Slowing Trucks
- Sysco’s Fiscal 3Q Earnings Rise
- Personal Spending 0.4% Rose in March
- Volvo Earns $61 Million in 1Q
- IEA Says OPEC Cut Too Steep
- Smithway’s Loss Narrows in 1Q
Arkansas Best Sells Wingfoot to Goodyear for $71.3M
Arkansas Best Corp., the parent of less-than-truckload carrier ABF Freight System, said Monday it had completed the sale of its 19% ownership interest in Wingfoot Commercial Tire Systems LLC to the Goodyear Tire & Rubber Company for a cash payment of $71.3 million.Fort Smith, Ark.-based Arkansas Best said it would use the money to reduce the outstanding debt under its credit agreement. As a result of the transaction, Arkansas Best said it expected to record an after-tax gain of about $8.4 million or 33 cents per share in the second quarter.
Since Oct. 21, 2000, Arkassas Best's tire retreading subsidiary, Treadco Inc., had been a part of the Wingfoot venture. The agreement gave Treadco the right to sell its interest in the joint venture to Goodyear until April 30, 2004.
(Click here for the full press release.)
Smithway’s Loss Narrows in 1Q
Truckload carrier Smithway Motor Express Corp. said late Friday it lost $1.6 million or 32 cents per share in the first quarter, compared with a loss of $2 million or 42 cents per share in the first quarter of 2002.The Fort Dodge, Iowa-based company said operating revenue decreased about 3.2% to $39.9 million from $41.2 million.
It said in a release that the results were consistent with its previously announced expectations.
Smithway is ranked No. 75 on the Transport Topics 100 list of the largest U.S. and Canadian trucking companies. Transport Topics
(Click here for the full press release.)
Surplus of Containers in N.J. Could Be Slowing Trucks
A shipping container surplus in New Jersey around Port Newark and the adjacent Port Authority Marine Terminal at Elizabeth is having a negative impact on truck traffic in the area, the Associated Press reported.The cause of the surplus is the huge U.S. trade deficit, AP said. Since it is cheaper for freight companies to buy new containers overseas than to ship empties back from the United States, the result is a stockpiling over hundreds of acres of industrial land.
owever, many people believe the stacking of containers discourages the cleaning and development of lots. AP said.
A study in New Jersey found the development of warehouse and distribution centers at the port would reduce highway truck traffic and clean up the contaminated former industrial sites, known as brownfields, where many of the containers now reside. Transport Topics
Sysco’s Fiscal 3Q Earnings Rise
Sysco Corp., a food service marketer and distributor, said Monday net income for its fiscal third quarter was $168.4 million or 26 cents per share, compared with $151.4 million or 23 cents in the same period last year.Sysco is ranked No. 3 on the Transport Topics Private 100 list of the largest private fleets in the United States and Canada. It distributes food service products to more than 400,000 customers.
Sales for the period ended March 31 grew 13.8% to $6.4 billion, the company said in a release.
The company, which has more than 140 distribution facilities, said the construction of its northeast redistribution center in Front Royal, Va., is progressing according to plan and the facility should be ready next year. Transport Topics
(Click here for the full press release.)
Personal Spending 0.4% Rose in March
U.S. personal spending in March rose for a second month, the Commerce Department reported Monday.Spending gained 0.4% last month to $7.526 trillion at an annual rate after rising a revised 0.1% in February. Incomes rose 0.4%, following a revised 0.2% increase in February.
Since consumer spending drives the economy, any increase would create additional demand for new factory goods and the trucking shipments that get them to stores.
Sales of vehicles increased as automakers offered deeper discounts, Bloomberg reported. Also rising were sales of durable goods, which jumped 1.6% in March after falling 1.5%.
Spending on services, which make up half the report, decreased 0.1%, the first decline in seven months, after holding unchanged in February.
The personal consumption expenditures index, a measure of inflation watched by Federal Reserve Chairman Alan Greenspan, rose 0.3%, suggesting inflation remains under control, Bloomberg reported. The Fed next meets May 6. Transport Topics
Volvo Earns $61 Million in 1Q
Swedish truck maker Volvo AB said Monday its net profit for the first quarter was $61.2 million, compared with a loss of $90.1 million a year earlier.However, the company was cautious about 2003, saying it expects demand for trucks to fall between 5%-10% in Western Europe and be "somewhat lower" in North America, the Associated Press reported.
Volvo said it was expecting to sell about 172,000 trucks in North America this year.
For the quarter, Volvo said sales of trucks rose 12%.
AP said that although profits were ahead of expectations, analysts were expecting a strong report after a positive earnings report from Volvo's Swedish rival Scania AB. Transport Topics
(Click here for the full press release.)
IEA Says OPEC Cut Too Steep
The International Energy Agency, an adviser to 26 oil-consuming countries including the United States, said Monday that OPEC’s cut in oil production was too steep, Bloomberg reported.Last week, the cartel agreed to reduce oil production by 2 million barrels a day starting June 1. (Click here for the full story.)
Claude Mandil, IEA’s executive director, told Bloomberg that the reduction will not allow prices to drop, which is needed for economic growth.
Crude oil is distilled down into diesel fuel and gasoline, making it important to the trucking industry. Transport Topics
