Announcing second-quarter results, Douglas Stotlar, president and CEO of Con-way Inc., said market conditions included lower freight demand, which he expects to see through the remainder of 2007. Net income for the carrier was $46.4 million in the second quarter, compared with net income of $68.9 million in the prior-year second quarter.
The company’s regional LTL operation, Con-way Transportation, reported operating income of $70.3 million, down 31.2% from second quarter 2006. The results included an $8 million pre-tax charge for litigation of a vehicular casualty claim. Tonnage-per-day actually increased 4.4% over the same period a year ago. The carrier’s operating ratio was 90.5 in 2007 vs. 86.7 for the same period in 2006. The operating ratio was affected by higher employee-related costs for increased driver recruitment and training, the vehicular casualty claim, and rebranding expenses.
Menlo Logistics, the company’s third-party logistics unit, reported operating income of $6.9 million, up 13.8% over the second quarter of 2006. This does not include earnings of $4.7 million by Vector SCM (Menlo sold its membership in Vector to General Motors at the end of 2006).
Con-way announced earlier it would acquire truckload carrier Contract Freighters Inc. (CFI) for $750 million. That deal is expected to close in the third quarter.