LTLs in the Black

Less than truckload (LTL) carriers are reporting healthy revenues and profits as freight demand continues to run high.

Overland Park, KS-based Yellow Roadway Corp. said third-quarter earnings rose 84% to $1.38 per share on $1.77 billion in operating revenue, up from earnings of 75 cents per share on revenues of $771 million in the same quarter last year.

For the first nine months of 2004, the carrier said earnings went up 75% to $2.73 per share on $4.99 billion in operating revenues, compared to earnings of $1.56 per share on $2.17 billion in operating revenues over the same period in 2003.

The company noted its subsidiaries all reported strong demand. Yellow Transportation’s LTL tonnage per workday went up 4.8% and LTL revenue per hundredweight, excluding fuel surcharge, increased 2.8%. Roadway Express reporting LTL tonnage per workday jumping 1.4% and LTL revenue per hundredweight, excluding fuel surcharge, went up 1.9%. New Penn Motor Express saw its revenue grow 26% and LTL tonnage per workday increased by 21.3%.

“Our full year earnings guidance is increasing to $3.90-$3.95 per share, which means we expect to earn $1.17 - $1.22 in the fourth quarter,” said Bill Zollars, Yellow’s chairman & CEO. “Our increased guidance is being driven by excellent execution, synergy efforts and favorable economic conditions. In addition, the company expects to pay down about $200 million of debt in 2004, versus previous guidance of $150 million.”

Ft. Smith, AR-based Arkansas Best Corporation – the parent company of LTL operator ABF Freight Systems – said net income topped $27.4 million on revenues of $461.9 million in the third quarter, compared to net income of $17 million on 12.6% lower revenues in the same period last year.

Robert Young III, the company’s chairman, added that ABF’s third quarter LTL tonnage per day increased 10% compared to the same period last year. ABF's truckload tonnage per day grew by 14.1% when compared to last year and billed truckload revenue per hundredweight, excluding fuel surcharge, increased by 4.7% over last year, he said.

“The LTL pricing environment remained firm as industry capacity continued to tighten during the historically busy third quarter,” Young noted. “The shortage of available truckload capacity continued to provide ABF with opportunities to handle full-load, spot shipments at favorable prices.”

NC-based LTL operator Old Dominion Freight Line said its third-quarter net income surged 34% to $12.2 million on 21.6% higher revenues of $215.1 million compared to the third quarter last year. Net income jumped 42.9% to $28.3 million on 21.6% higher revenues of $600 million through the first nine months of 2004 compared to the same period last year.

“We achieved these results in spite of the disruption caused by hurricanes that hit our Southeastern markets, lowering our earnings by approximately 2/10th a cent per share. Nonetheless, our performance reflected a combination of substantial revenue expansion, which has grown an average of 19.3% over the last nine quarters,” said Earl Congdon, chairman & CEO.

He noted Old Dominion recognized a 14.9% increase in LTL tons shipped produced by an 8.9% increase in the number of LTL shipments and a 5.4% increase in LTL weight per shipment.

Based on those results, Old Dominion is boosting its full-year earnings projections to between $1.58 and $1.60 per share, up from $1.55 to $1.59 per share. “Among the factors on which this guidance is based is anticipated growth in revenue from operations in excess of the Company's long-term targeted rate of 10% to 15% annual growth,” Congdon said.

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