P.M. Executive Briefing - Oct. 27
This Afternoon's Headlines:
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Wabash National Corporation Announces 31 Percent Increase in Third Quarter Earnings
Wabash National Corp., which makes Wabash and Fruehauf trailers and RoadRailer units, says it hit records in the third quarter and first nine months of 1999. The company saw $374.7 million in third-quarter net sales, up 12%from the year-earlier quarter, with net income up 31% to $10.4 million, or 43 cents a share.In the first nine months, the company saw $1.1 billion in net sales, up 14%from the comparable 1998 period, with net income up 29% to $27.1 million, or $1.10 a share. The company raised its gross margins 1.1 percentage points to 9.4%, says Chairman, President, and CEO Jerry Ehrlich.
Rolling Pickets Hit Roadblock in Ark.
The Teamsters union says some rolling pickets in Osceola, Ark., received threats of jail from local police while trying to follow Overnite Transportation trucks and picket at delivery destinations. Teamsters attorneys contacted authorities in the state to ensure that they knew federal labor law allows rolling pickets when an Overnite trucker is at the receiver's location.Two members of a Memphis rolling picket at the Lilly Co. say an Overnite truck came close to striking them during a sudden U-turn. At the Memphis Overnite site on Brooks Road, the picketing featured union members from United Parcel Service, Consolidated Freightways, Yellow Freight System, and Roadway Express. Memphis Commercial Appeal Online (10/27/99) ; Conner, Charles
Navistar Board Approves New Share Repurchase Plan
The board of directors at Navistar International has okayed up to $243 million for a repurchasing shares plan. Ongoing earnings expansion will allow the company to embark on the repurchasing plan, says company Chairman, President, and CEO John R. Horne, who says the program "confirms our confidence and enthusiasm for our strategic outlook for continued profitable growth in fiscal 2000."Oct. 31 is the last day of the fiscal year at Navistar, which said it saw net income of $412 million in FY99's first nine months. PR Newswire (10/27/99)
International Star Inc. Receives Purchase Order
International Star says it has received an $11 million-plus purchase order for 6,000 QWIKTRACK vehicle-tracking units; 5,000 are for trailers and the rest for tractors. The units will be delivered starting at the end of January. Business Wire (10/27/99)Transit Group Finalizes New $150 Million Credit Facility
Transit Group says it has gained a $150 million five-year credit facility with a maximum $40 million for acquisitions. "It is our intent to target non-asset-based transportation companies in our future acquisition strategy," says President and CEO Philip A. Belyew.The credit agreement will also go toward continuing expansion as well as the equipment and working-capital needs of the group's trucking subsidiaries. Bank One, Bank of America, and AmSouth Bank head the list of participating banks. Business Wire (10/27/99)
No, Really, We're a .Com
FDX Chief Executive Officer Fred Smith believes the company's stock price would be higher if Wall Street saw the company as a key player in the Internet economy. Smith realized early in Federal Express's existence that electronic data interchange would have a huge effect on the parcel-delivery business."Fast-cycle distribution ... allows goods-producing companies to substitute information and velocity of inventory for working capital," he says. They no longer require large amounts of spare parts on hand because they can get the parts the next day from FDX, which can continually monitor the shipments' locations.
The ability to track parts movements allows Dell Computer to build custom computers-after, not before, they are ordered – on what Smith calls "a worldwide assembly line" and deliver them only days later. It is helpful for computer companies not to have a backlog of inventory continually becoming out of date with technological advances. Companies can also cull market data from the information that is gathered in the delivery process. But the parcel-delivery industry, with few big companies, gets little attention from investors.
FDX recently fell short of quarterly earnings projections, which it attributed to a rise in the price of fuel. But investors wanted to know why FDX's volume did not show the expected fast growth due to e-commerce-which Smith is still certain will happen. FDX's stock price fell 12% because of the shortfall. Worth (11/99) Vol. 8, No. 10; P. 55; Collingwood, Harris
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