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Roadway sees bottom
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July 3, 2001: 9:11 a.m. ET
Major trucker sees sign of turnaround as it beats lowered 2Q target
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NEW YORK (CNNfn) - Roadway Corp., one of the nation's leading trucking companies, beat lowered second-quarter forecasts Tuesday as the company's CEO said it appears the weakened freight levels may be near a bottom.
The company earned net income of $4 million, or 22 cents a share, for the 12-week quarter ended June 16. That was down from the $9.9 million, or 52 cents a share, it earned in the year-earlier period, but better than the company's May 31 guidance that it would earn between 16 and 21 cents a share in the period.
Analysts surveyed by earnings tracker First Call lowered their earnings per share forecasts for the period to 18 cents from 43 cents before that warning.
Shares of Roadway (ROAD: Research, Estimates) gained 62 cents to $24.16 in before-hours trading Tuesday, after losing 24 cents in Monday's regular session.
The company said it still expects a difficult third quarter, with a drop in freight and thinner profit margins compared with the year-ago results. But it also sees signs that things seem to be turning around.
"Although we haven't seen a recovery, it does appear that after three consecutive quarters of decline, we have seen business levels stabilize," CEO Mike Wickham said. "Freight rate levels remained firm during the quarter."
Revenue in the quarter fell to $642.1 million from $707.4 million a year earlier, as freight tonnage fell 13 percent to 1.7 million. The ratio of operating expenses to revenue, the key measure of a trucking company's economic performance, rose to 99.0 percent from 97.6 percent a year earlier.
The company did not give any specific EPS guidance for the third quarter, but it said the operating ratio will rise again when compared to a year ago, but improve from second quarter levels.
Roadway said the ratio will be a half-percentage point higher than the 97.3 percent rate in the third quarter of 2000, while tonnage levels will decrease 10 percent from year-ago levels. First Call's forecast calls for third-quarter EPS to fall to 36 cents from 57 cents a year earlier.
The company announced the day before the warning that it is looking at possibly buying, merging with or partnering with other companies. 
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Roadway Express
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