P.M. Executive Briefing - Oct. 20
This Afternoon's Headlines:
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Truck Rate Bureaus Withdraw Proposal Following STB Action
The Surface Transportation Board's probe into the 4.9% to 5.5% rate-hike proposals from EC-MAC Motor Carriers Service Association, the Middlewest Motor Freight Bureau, the North American Transportation Council, and the Rocky Mountain Tariff Bureau ended as the four rate bureaus took back the proposals.At the end of last month, the STB said it was suspending the hikes and launching the probe due to lack of evidence that expenses had gone up enough to warrant them. Two shipper groups had said the rate increases outstripped the higher costs.
CNF Transportation Posts Net Income Increase for Third Quarter
CNF Transportation says it saw third-quarter revenue of $1.41 billion, up 10%, with net income for common shareholders rising to $42.1 million from the year-earlier figure of $41.9 million.The company saw operating income fall 4% from 1998's third quarter to $85.8 million, while Con-Way Transportation Services' third-quarter operating income rose 12% to $56.9 million, Menlo Logistics' rose 13% to a $6.3 million record, and Emery Worldwide's rose 4% to $22.6 million.
Con-Way's third-quarter revenues rose 12% to $490.7 million, Menlo Logistics' revenue rose 10% to $178 million, and Emery Worldwide's revenues rose 11% to $617.3 million. However, CNF is "disappointed with the break-even performance of our Priority Mail contract operations, which is due to a pricing dispute with the U.S. Postal Service," says President and CEO Gregory L. Quesnel.
For the first nine months, net income for common shareholders set a company record of $129.1 million, counting non-recurring gains, up from the year-earlier figure of $98.2 million. The first nine months saw record revenue of $4.03 billion and record operating income, with year-over-year gains of 13% and 21%, respectively. Business Wire (10/20/99)
Sterling Announces Shutdown Just as CAW Drive About to Begin
While the Canadian Auto Workers were to start trying to unionize the St. Thomas, Ontario, Sterling Truck plant Thursday, Sterling said Tuesday that the plant will see a two-week closure, during which managers and white-collar employees will stay on the job.Jim McNamara, company public relations manager, says the company is not engaging in a layoff but is "temporarily suspending production" so the plant can get ready for the installation of another production line and because there is a truck backlog. The commencement of production of the medium-duty Acterra truck at the plant is set for April.
DaimlerChrysler gave the union the right to unionize the St. Thomas plant. Sterling and an advisory council representing the employees are in talks about a compensation package for workers. London (Ontario) Free Press (10/20/99) P. D1; De Bono, Norman
Waste Management to Report Ex-CEO Will Leave the Board
An unnamed source says it is anticipated that the filing with the Securities and Exchange Commission by Waste Management Inc. will say former Chairman and Chief Executive John E. Drury, who received brain surgeries and is still under treatment, will be leaving the board. Wall Street Journal (10/20/99) P. B17Focus-Volvo 9-mo Report Disappoints, US Deal Mooted
In 1999's first nine months, AB Volvo's profit after financial items missed market forecasts, coming in at $3.9 billion, and it said there is poor demand in its important growth markets.Chief Executive Leif Johansson says the company wants to get more of the North American market with an acquisition or with organic growth. He says the company foresees a decline in North American demand, but it thinks European demand will still be high. Next year, the truck market is expected to get better, says Chief Executive Karl-Erling Trogen of Volvo Truck.
The European Union is still looking into the Scania takeover on competition grounds; the EU Commission is set to finish the review Oct. 25 but could go into a comprehensive probe, which would add four months to the merger. Reuters (10/20/99) ; Isa, Mariam
Appeals Court Says State Owes $15,290 for Truck it Seized
The North Carolina Court of Appeals affirmed a state Industrial Commission decision, saying C. Keith McGee is owed a total $15,290 by the state Department of Revenue due to the seizure of the Kenworth truck he had lately bought. The truck was seized from McGee's mother's yard because it was still listed as belonging to a man who owed money to the Department of Revenue.During the span of over two years in which the state was holding the truck, the engine block cracked because McGee was not allowed to add antifreeze for the winter and no one added the antifreeze he left at the garage. "There was no evidence of why the truck was being held after it became clear that [the previous owner] did not own it," the Industrial Commission found. News & Observer (Raleigh, N.C.) Online (10/20/99)
PACCAR Sales and Earnings Accelerate to Record Levels
This year's third quarter and first nine months saw PACCAR, which among other things makes Peterbilt, Kenworth, and Foden trucks, hit earnings records. In the third quarter, the company saw net income of $144.7 million, up 50% from the year-earlier quarter, and consolidated net sales of $2.2 billion, up 17%. The company now has seen year-over-year gains in operating profits for 11 quarters in a row.In the first nine months, the company saw $403.7 million in net income, up 34% from the comparable 1998 period, with sales of $6.4 billion, up 18%.
Chairman and CEO Mark C. Pigott credits strong North American and European truck demand and says the company has also gained a "share in the North American medium- and heavy-duty truck markets." The company's financial services segment has also expanded over the three- and nine-month periods, says Vice Chairman Mike Tembreull. Business Wire (10/20/99)
Ryder Reports Third Quarter Results
Ryder Systems says its third-quarter continuing-operations revenue was $1.26 billion, up 7% from the year-earlier quarter, with continuing-operations earnings down to $35.1 million from $40.5 million. The first nine months saw revenue of $3.63 billion, up 7% from the comparable 1998 period, and continuing-operations earnings down to $66.6 million from $98.9 million. The earnings included such unusual items as Y2K costs this year and last as well as an after-tax charge in the third quarter.Ryder Transportation Services saw third-quarter dry revenue of $615 million, up 5% from the year-earlier quarter, while contracts not being renewed and a rise in certain fixed costs caused pretax earnings to drop to $54.7 million from $64.7 million. In the first nine months, Ryder Transportation Services saw net new sales of $60 million, up 2% from the year-earlier period.
Ryder Integrated Logistics' third-quarter total revenue was $423 million, up 15% from the year-earlier quarter, with operating revenue of $325 million, up 11%, while pretax earnings fell to $17.8 million from $23.2 million. The first nine months saw net new sales for Ryder Integrated Logistics totaling $100 million, up roughly 90% from the year-earlier period. PR Newswire (10/20/99)
OTR Express Chairman and Founder Assumes Additional Positions as President and CEO
OTR Express says founder and Board Chairman William P. Ward will take over the posts of president and CEO left behind by Gary J. Klusman, who no longer works for OTRX. Ward says the company intends to add as many as 150 owner-operators to the company's current 67.He says that among the things the company has done to get drivers during the trucker shortage are "increasing pay as of September 30, adding referral and sign-on bonuses, improving quality of life for drivers, and hiring a vice president of fleet management." Business Wire (10/19/99)
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