P.M. Executive Briefing - Jan. 21
This Afternoon's Headlines:
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NTSB Chairman Wants Better Medical Exams For Bus Driver, Truckers
National Transportation Safety Board Chairman James Hall said Thursday that the Federal Aviation Administration program used to evaluate a pilot's health should be applied to commercial-vehicle drivers. He made the statement during a break from a New Orelans bus-crash hearing.According to Dr. Warren Silberman, chief medical officer with the FAA's pilot medical certification program, doctors that evaluate pilots are required to take a one-week training course before examining pilots. In addition, the FAA must be provided with the results of medical exams and of drug and alcohol tests.
Oshkosh Truck Net Jumps 56%
Specialty truckmaker Oshkosh Truck says its net income for the first fiscal quarter was up 56% to 42 cents per share, beating a First Call/Thomson Financial poll estimate by 2 cents. Overall first-quarter earnings were 6.1 million, with net sales of $244 million, up 10%.The commercial truck division is still ahead of the company's other segments in sales and earnings growth, with a 19% sales rise due to gains in concrete placement and refuse sales. The company also saw $9.1 million in operating income, up 89%. Reuters (01/21/00)
Truck Use Falls, Trailer Use Up in Fourth Quarter
A MacKay & Co. survey says average vehicle utilization of Class 6-8 trucks in 1999's fourth quarter dropped about 1.8 percentage points from the year-earlier quarter to 84.1% of capacity, while trailer usage rose 8.2 percentage points to 88.6%.Class 8 utilization, down 2.1 points to 84.5% overall, rose 2.3 points for for-hire carriers, 4.1 points for private fleets, and 6.2 points for lease/rental utilization, which was 94.5%. Owner-operator utilization fell 1.7 points, ostensibly because fewer independent contractors are being used by carriers, but the drop in Class 8 utilization is mostly due to the construction/mining/refuse, agriculture, and "other" market segments. Class 7 utilization rose 0.3 points to 85%, while Class 6 utilization dropped 4.1 points to 76.3%.
For trailer utilization, the only segment that fell was agriculture. The trailer utilization rise for owner-operators was 4.5 points, for for-hire carriers was 1.3 points, for private carriers was 6.8 points, and for lease/rental was 13.3 points. Lease/rental trailer utilization hit a five-year record of 91.5%.
According to the MacKay report, the trailer utilization rise in the last six months of the year seems to have been due mostly to more freight being hauled, although Y2K stockpiling could have been a small contributor. Heavy Duty Trucking Online (01/21/00)
Drayage Industry to Get a Taste of Consolidation
Roadlink U.S.A., a well-financed company with strong intermodal credentials, plans to consolidate independent drayage companies across the country.According to Roadlink President and COO Ron Sorrow, consolidation will lead to better ship schedules, a lower driver shortage, and higher equipment turns. The top five U.S. drayage companies only have 5% to 7% of the market each, he said. Roadlink's creator, John Oren, said consolidation will allow technology costs to be "spread over a larger base," allowing drayage companies to get the technology they need for better management. Seven independent contractors will be the base of Roadlink and will initially give the company $160 million in annual revenue.
Oren said one of the most important aspects of the deal is that the first seven companies will keep 50% of their equity in Roadlink, which will keep veteran managers from leaving. Testifying to Roadlink's credibility is that, according to sources, it has the backing of General Electric Capital.
One critic of consolidating the drayage business, a West Coast industry veteran, said he does not know Roadlink will be buying, because drayage is a non-asset business with independent drivers. Nevertheless, Roadlink expects a capital return of 20% and growth rate of 13%, which is double the intermodal industry growth rate. Journal of Commerce (01/21/00) P. 1; Kaufman, Lawrence H.
Cat Clears Lowered Estimate
Caterpillar's fourth-quarter net income dropped 20.6% from the year-earlier quarter to 67 cents per diluted share, or $239 million overall, beating a lowered First Call estimate by 3 cents per share. The company saw $5.02 billion in fourth-quarter sales, down 7%.Analysts lowered their earnings estimate from 97 cents per share after the company said Nov. 19 that its profits would not be much higher than the third-quarter net of 61 cents per share. Caterpillar blamed the drop on price competition, as well as poor machine sales in 1999's last six months.
The company once again said it expects revenue and sales growth this year, but it foresees a drop in North American sales. Full-year net income fell to $946 million ($2.63 per share) from $1.5 billion ($4.11 per share) the previous year, with sales falling from $19.72 billion to $18.56 billion. CNNfn Online (01/21/00)
Beall Asks for Rear Guard Exemption
Saying it has been unable to develop a suitable design to comply with federal rear impact protection rules, Beall Trailers requested that the National Highway Traffic Safety Administration grant a three-year extension of the company's exemption.NHTSA exempted Beall from the rules temporarily in 1998 because the company's dump body trailers required significant alterations to achieve compliance with the rules. The designs Beall has developed since then all have problems with maintenance or paver clearance. The company said the product that makes up two-fifths of Beall's production would have to be given up if the exemption ends.
The request was published in the Jan. 20 Federal Register. TruckingInfo.com (01/21/00)
Union Pacific Corp. Swings to a Profit on Gains in Freight Traffic, Efficiency
Union Pacific said it saw $242 million (95 cents per diluted share) in fourth-quarter earnings, up from a $189 million (77 cents per share) loss in the year-earlier quarter, as revenue gained 6.8% to $2.87 billion. Leaving out a one-time charge for a reevaluation of goodwill at the Overnite Transportation unit, fourth-quarter 1998 earnings were $96 million (39 cents per diluted share).The railroad's six major commodity groups all posted revenue gains, with intermodal and industrial products out in front, and the company has alleviated congestion and bottlenecks seen in 1997 and 1998 after the Southern Pacific Rail acquisition.
Although analysts thought Overnite's fourth-quarter earnings would be steady, strike-related costs led to a $13 million pretax operating loss. In the year-earlier quarter, the trucking unit's operating income was $16 million, leaving out the goodwill charge. Wall Street Journal (01/21/00) P. B10; Machalaba, Daniel
Truck Firm Says Profits Rose 53.1%
Arkansas Best said its fourth-quarter earnings from continuing operations rose 53.1% from the year-earlier quarter to $16.5 million, or 68 cents a share, on revenue of $455.5 million, up $51 million. Actual earnings were $16.4 million due to a $122,000 loss caused by discontinued operations. Full-year net income from continuing operations rose 63.8% from 1998's net income to $51.2 million, as revenue rose 7.1% to $1.7 billion.Subsidiary ABF Freight Systems generated the most income for Arkansas Best; the subsidiary was helped by a greater amount of two-day routes, which are beating longer routes in revenue growth. Altogether, however, the company could not pinpoint a single cause for its strong performance in the quarter and full year, according to director of investor relations David Humphry.
During the earnings conference call, Stephens Inc. analyst Tim Quillin predicted the company's stock price would rise due to the quarterly report. Arkansas Democrat-Gazette Online (01/21/00); Wieland, Barbara
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