First-quarter earnings of $5.1 million turned into a $77.7-million loss for LTL conglomerate USFreightways Corp. as it took several charges in light of new accounting rules adopted this year.
A charge of $12.8 million was taken to relinquish Chicago-based USF's interest in its Asia joint venture, and a $70-million charge was recorded related to goodwill impairment at USF Worldwide under the new accounting standards.
USF chairman, president & CEO Samuel Skinner said the carrier's income was negatively impacted mainly from its LTL regional trucking subsidiaries due to the continued sluggishness of the economy and resultant lower volumes and losses in the company's freight forwarding segment.
For USF's regional trucking group, first-quarter revenue amounted to $430.2 million, a 6.3% decrease from 2001. Fuel surcharges, which are included in the reported revenue, declined by approximately 2.1% as a percent of revenue compared to last year's first quarter as fuel prices declined. Operating earnings for the group were $16.9 million in 2002 compared to $24.1 million for the same period of 2001, a 30% decline, said Skinner.
Operating earnings for USF's logistics group decreased 18% to $2.3 million this quarter from $2.8 million in the same period in 2001, while revenue decreased 6% to $66.6 million this quarter from over $70 million last year. USF Glen Moore, the company's truckload carrier, recorded a 2.6% revenue increase to $25.3 million in the first quarter, with operating earnings of $900,000, compared to $800,000 in profit last year.
USF said capital expenditures for the quarter almost doubled, rising to approximately $27 million mainly for revenue equipment, terminal facilities and information technology. Last year, capital expenditures over the same period amounted to $16 million for revenue equipment and information technology.