SCS sees 1Q earnings dip on Jevic drop

April 24, 2006
Despite remaining profitable overall, Kansas City, MO-based SCS Transportation saw its net income drop in the first quarter compared to the same period last year as its hybrid TL/LTL subsidiary Jevic lost money

Despite remaining profitable overall, Kansas City, MO-based SCS Transportation saw its net income drop in the first quarter compared to the same period last year as its hybrid TL/LTL subsidiary Jevic lost money.

“Despite continued service consistency, Jevic volumes were impacted by a combination of increased competitive pressures, an unseasonably warm winter, and excess truckload capacity,” said Bert Trucksess, SCS chairman, president & CEO. “The volume weakness produced unfavorable operating leverage, which more than offset progress on cost management initiatives.”

He said Jevic’s revenue declined 2% to $84 million in the first quarter compared to the same period last year, while tonnage declined 5% even as yields grew 3%. First-quarter LTL tons were flat compared to the fourth quarter of 2005, while truckload tons decreased 10%, Trucksess noted. As a result of the lower business levels, Jevic reduced its workforce by approximately 8% during the first quarter and reported an operating loss of $2.3 million.

Yet SCS stayed profitable overall on the strength of profits from its Saia Inc. regional LTL subsidiary. Saia posted strong results despite the lingering impact of Hurricanes Katrina and Rita on its service territory.

Trucksess said Saia’s revenue increased 23% to $205 million in the first quarter vs. the same period in 2005, with LTL tonnage increasing 15%, yield growing 6%, and operating income jumping 39%.

Those results helped boost SCS’ overall revenue by 13% to $287 million, though net income slid to $2.4 million compared to $4 million in the first quarter of 2005.

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