Roadway's chairman & CEO Michael Wickham said the sharp decline in profits over the last six months resulted from low freight volumes at the beginning of the year. However, Roadway's purchase of LTL carrier New Penn Motor Express and truckload operator Arnold Transportation Services (ATS) helped maintain profitability despite the downturn in freight flow.
"Roadway Next Day's solid profitability more than covered the interest expense associated with our acquisition of Arnold Industries [owner of New Penn and ATS] and contributed to our overall earnings improvement. We expect that to continue and improve as we go forward," Wickham said.
"Coming out of a January trough, Roadway Express' LTL volumes showed steady, but slow-paced improvement in every accounting period of our first two quarters," he added. "Helped by industry consolidation in the Northeast, New Penn Motor Express, our next-day regional ground carrier, has already seen its business volumes return to 2001 levels. In addition, business levels at our full-truckload subsidiary, Arnold Transportation Services, showed year-over-year improvement. All three companies were solidly profitable."
Akron, OH-based Roadway's total second quarter revenues topped $697.1 million -- up 8.6% compared to revenues of $642.1 million in the second quarter of 2001.
Net income for the second quarter reached $5.67 million, a 20% jump from $4.02 million in the second quarter last year.
For the first six months of 2002, Roadway's total net income dropped to $3.92 million – a decrease of 56% compared to the $9 million it posted in the fist six months of 2001.
For the first half of 2002, revenues topped $1.33 billion, up 3.2% compared to revenues of $1.29 billion in the first half of last year.
"Although we are seeing freight levels trend in the right direction, we still characterize this growth as slow and steady," said Wickham. "Looking ahead, we expect our year-over-year comparisons to turn positive in the second half of the year. For the third and fourth quarters, we expect to see a margin improvement of between one-half and one percent."