A.M. Executive Briefing - Sept. 17
This Morning's Headlines:
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FDX Shares Sink on Results for Quarter
FDX Corp.'s stock price dropped 12 percent to $38.25 after the company announced it did not meet projections for its first fiscal quarter. FDX unit RPS netted $159 million, or a per-share price of $0.52, on revenue of $4.32 billion, up from year-earlier figures of $140 million net, $0.50 per-share net, and revenue of $4.082 billion.From October 1998 to May 1999, the company's stock price had gone up close to 200 percent because of anticipation that FedEx would get the bulk of e-commerce delivery. On Thursday, however, the company said that growth in domestic deliveries has slowed greatly, with RPS volume five points lower than projected.
onaldson Lufkin & Jenrette analyst Paul R. Schlesinger says growing use of electronic communication may be to blame for FDX's lost volume. Wall Street Journal (09/17/99) P. A3; Blackmon, Douglas A.
Truckers Shut Down as Floyd Blew Past
Many trucking companies shut down operations on the East Coast as Hurricane Floyd passed. While closing down due to a hurricane is common, it is expected that the magnitude of this storm will affect trucking up and down the coast.American Freightways employs someone who keeps up with reports on storms, and the company then decides when to shut down, with safety as an important consideration, says Pat Reed, executive vice president of operations.
John Greer of Arkansas Best says another reason trucking service was halted in the region was because many businesses in the area had been evacuated. After storms pass through, trucking companies often get some additional business by carrying needed emergency supplies.
USA Truck director of operations Gary Lewis says it was too early to tell how much of that will be needed, and he adds that "this [storm] was not nearly as bad as we thought it might be." Arkansas Democrat-Gazette Online (09/17/99); Wieland, Barbara
Province to Fix Deadly Strip
Ontario Transportation Minister David Turnbull is to announce today the planned safety upgrades to the Chatham-London portion of Highway 401, where 13 people have died so far in 1999.The Canadian Automobile Association says the problems with that stretch of highway exist on many highways in the province, and the group believes Turnbull's safety proposals should apply to the entire length of the 401 in Ontario. But Turnbull's proposals apply only to the Chatham-London stretch.
Liberal Party provincial legislator Pat Hoy charges that the transportation ministry has held back the release of its report on the Chatham-London stretch, which Turnbull will make public today, because of concerns that the cost of the upgrades would interfere with the government's planned spending cuts.
In related news, the chief coroner for Ontario has called for an inquest in to the massive Sept. 3 pileup of 80-plus vehicles on a part of the 401 not in the Chatham-London stretch. Officials say conditions there are not unlike those in the Chatham-London stretch. Toronto Star Online (09/17/99); Mallan, Caroline; van Rijn, Nicolaas
Senate Urges Amtrak to Pay Tab for Bourbonnais Rescue, Cleanup
A U.S. Senate resolution says Amtrak and the others involved in the March truck-train crash in Bourbonnais, Ill., should pay back the village and Kankakee County for the costs of rescue and cleanup. Amtrak has already paid for close to 80 percent of the costs. However, local authorities say they might have to cut services because emergency agencies lost so much of their resources. Chicago Tribune Online (09/17/99); Hilkevitch, JonTrism Files for Chapter 11 Reorganization
The Georgia-based TL carrier Trism Inc. has made its announced Chapter 11 reorganization filing official Thursday as lawyers representing the company got the petition to the Wilmington, Del., federal Bankruptcy Court just before the court closed early due to Hurricane Floyd. "They're up there puddling around in a huge rainstorm trying to get that done," says President and CEO Ed McCormick.The company has $86 million worth of senior subordinated notes due late next year. The company did not make its payment in June, "to draw the attention of the bondholders," says McCormick. The company put together a restructuring plan that will lower its debt by $56 million and push back the due date to 2004. The Trucker Online (09/16/99); Whitsett, Jack
(Editor's Note: The above brief is a corrected item. The amount of debt was incorrectly stated.)
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