P.M. Executive Briefing - Jan. 16
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OPEC Moves Closer to Production Cut
Members of the Organization of Petroleum Exporting Countries moved closer to a 5% cut in oil production as they prepared to meet Wednesday in Vienna, Austria, the Associated Press reported Tuesday.The article said OPEC was leaning towards cutting 1.5 million barrels of oil per day, though some cartel members, such as Saudi Arabia, have suggested deeper cuts. OPEC currently produces roughly 26.7 million barrels of oil per day.
Industry analysts say OPEC plans the production cuts to avoid an oversupply in the market and keep prices above $25 per barrel. Transport Topics
Contrans Reports Increased Q1 Earnings
Canadian trucking company Contrans Corp. reported net earnings of $1.876 million or 39 cents per share for its first quarter of 2001, ending Nov. 30, which was slightly higher than the same period last year, when the company earned a net income of $1.872 million or 37 cents per share.The Woodstock, Ontario-based company carries general truckload freight and special commodities on bulk, van, dump and flatbed trailers throughout the U.S. and eastern Canada. Transport Topics
UPS to Purchase First International Bancorp
Delivery company United Parcel Service (UPS) said Tuesday that it has agreed to purchase First International Bancorp Inc., the parent company of First International Bank, for $78 million in UPS stock.The acquisition will allow UPS to expand its UPS Capital Corp. subsidiary to serve small- and medium-sized businesses, the company said.
Hartford, Conn.-based First International Bank provides government-backed lending to manufacturers, wholesalers and distributors that trucking fleets serve. Transport Topics
Dana Rejects DaimlerChrysler's Price-Cut Demand
Light-truck axle maker Dana Corp. (DCN) told DaimlerChrysler (DCX) it cannot meet the vehicle giant's demand for a 5% price cut, Bloomberg News reported Tuesday.Dana Chief Executive Officer Joe Magliochetti made the statement Monday night in a speech to a Detroit audience that included DaimlerChrysler CEO Juergen Schrempp, according to the news service.
DaimlerChysler had demanded the price cut from all suppliers of the Chrysler unit, which will probably report a fourth-quarter loss of $1.25 billion. However, parts makers have said the general downturn in the market for cars and trucks has hurt them, too.
Magliochetti said his company hadn't ruled out some discounts and would discuss price cuts on an individual product basis. Parts makers ArvinMeritor (ARM) and Federal-Mogul Corp. (FMO), along with diesel engine maker Cummins Inc. (CUM), have also said they cannot afford the discount. Transport Topics
FedEx to Acquire 10 Airbus A380 Freighters
Express transportation company FedEx Express said Tuesday that it plans to acquire up to 10 Airbus A380-800F airplanes by 2008.The new planes will be able to hold twice the load that FedEx's current MD-11 planes carry, the company said.
FedEx Express is a subsidiary of delivery company FedEx Corp. (FDX) Transport Topics
Citigroup 4Q Earnings Up Despite Associates' Purchase
Citigroup (C) said Tuesday its fourth-quarter earnings were up 11% to $3.33 billion after taking losses from its Associates First Capital truck loan and leasing portfolio into account, along with timing differences between the two companies' accounting policies.Associates' core income for the fourth quarter was $289 million versus $394 million in the prior year period, reflecting an aggregate charge of $146 million relating to a transportation loss provision for the truck loan and leasing portfolio.
Associates's quarterly revenue grew 22%, driven by higher net interest income as a result of 17% receivables growth. Expenses in the quarter rose 19%. Associates suffered from recent stressful trends in trucking, including higher fuel prices that hit owner-operators particularly hard. Citigroup bought the lender last year. Transport Topics
Cardinal Names Sanderson to Head Clicklogistics
Cardinal Logistics Management announced that it has named Tom Sanderson to be chief executive officer of its online subsidiary, Clicklogistics.That operation provides transportation management services that combine Web-based tools with real-time support from industry experts to help clients control their shipping processes. Clicklogistics plans to launch an online transportation manage-ment system by April.
Before joining Clicklogistics, the 20-year transportation veteran was co-owner and president of PTCG Inc., now known as Logistics.com. He was founding president of J.B. Hunt Special Commodities Inc.
Concord, N.C.-based Cardinal offers dedicated carriage, delivery services and non-asset logistics management. Transport Topics
BorgWarner Issues Earnings Warning
Vehicle-parts maker BorgWarner warned Tuesday that it expects lower earnings for both full-year 2000 and the first quarter of 2001. The company supplies components to builders of heavy commercial trucks as well as passenger vehicles, and those customers have been cutting back sharply amid weak sales.For 2000, the Chicago-based company said it now expects earnings of $5 per share, compared with $5.07 in 1999, and that it has taken a charge against earnings of 72 cents a share for restructuring costs. It has cut some jobs permanently, and is implementing some temporary layoffs along with production cutbacks.
For first-quarter 2001, BorgWarner said its earnings could come in at least a third lower than the $1.53 per share that it earned a year earlier.
John Fiedler, chairman and chief executive officer, said in a company statement that "our industry fell faster and further than expected in the last months of 2000, and continues to struggle with day-to-day uncertainty. As a result, we expect a very difficult first six months in 2001."
BorgWarner's customers include Navistar, Ford, General Motors, DaimlerChrysler, Toyota and Caterpillar. Transport Topics
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Headlines From Today's A.M. Briefing
- Marten Transport To Report Better-Than-Expected Earnings
- USF Announces New USF Glen Moore President
- Yellow Folds WestEx, Action Express Into Saia
- Fritz Reports Lower 2Q Earnings
- Emery Veteran Named CEO of Airline Subsidiary
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