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Laidlaw details job cuts
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April 8, 1999: 7:51 p.m. ET
Company to slash 2,200 jobs from ambulance unit; reports 2Q profits
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NEW YORK (CNNfn) - Laidlaw Inc. said Thursday it will cut 2,200 jobs, or 10 percent of its workforce, as part of a major restructuring of its ambulance service business.
The Burlington, Ontario-based transportation company also reported second-quarter earnings a penny ahead of reduced Wall Street estimates.
Laidlaw (LDW) warned investors last month that its second-quarter results would be weaker than expected and that it would restructure its troubled American Medical Response ambulance unit.
The company expects to take a $255 million non-cash charge in the third quarter for the restructuring. Laidlaw said most of the job cuts will occur in its Northeastern and Southern U.S. operations.
During the last month, Laidlaw has closed 11 ambulance operations in Texas and Southeastern states.
2Q edges out revised estimates
In its fiscal second quarter, Laidlaw reported a net income of $38.9 million, or 12 cents per share, on $845.9 million in revenue. Those results include a gain of $4.3 million, or a penny per share, on the sale of Renal Care Group Inc.'s shares, which were offset by $4 million in expenses associated with Year 2000 projects.
Analysts polled by First Call expected Laidlaw to report a profit of 11 cents per share.
Laidlaw's results were well off its year-ago earnings, when it logged a profit of $69.1 million, or 21 cents per share, on revenue of $1 billion.
"With the exception of ambulance operations, results for the quarter are reasonably good and confirm that the company is in position to meet its targets for the balance of the year," said James Bullock, Laidlaw's president and chief executive officer.
The company is counting on its recent $650 billion acquisition of bus carrier Greyhound Lines Inc. to add $900 million in annual revenues to its transit and tour unit.
For the first half of fiscal 1999, Laidlaw reported a profit of $124.2 million, or 38 cents per share, on revenue of $1.7 billion, compared with first-half 1998 earnings of $151.1 million, or 46 cents per share, on revenue of $2.1 billion.
Laidlaw provides school bus and public transit services; healthcare transportation services; and management of physicians' services in the United States and Canada.
Laidlaw shares rose 3/16 to 7 in Thursday trade.
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Laidlaw
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