Thursday, October 8th16.4°C

TransForce Q1 profits plummet to $5.9 million due to severe winter weather

MONTREAL - Transportation firm TransForce says its first-quarter profits plummeted to $5.9 million from $18.9 million a year ago due to severe winter weather, higher costs and persistent economic softness.

The Montreal-based trucking, logistics and waste management firm earned six cents per diluted share for the period ended March 31, compared with 20 cents per share a year earlier.

Adjusting for one-time items including the fair value of derivatives and currency gains, TransForce (TSX:TFI) earned $19.9 million or 20 cents per share, one cent less than analyst forecasts. That compared to $24.4 million or 26 cents per share in the prior-year period.

Revenues increased 2.8 per cent to $770.5 million, including $44.1 million from January's acquisition of Clarke Transport and Clarke Road Transport. Excluding acquisitions, revenues declined due to lower volume and a planned reduction in rig moving activities across North America, partially offset by the higher U.S. dollar.

TransForce said earnings before interest and taxes was $33.2 million, down from $44.6 million in the prior year.

It generated $35.1 million of free cash flow due to lower taxes and proceeds from asset sales, which was mainly used to repurchase $25.9 million of its common shares.

TransForce shut its Canadian rig-moving business last year and followed that up by closing four additional rig-moving terminals in the U.S. and putting the assets up for sale.

Energy services revenues sustained the biggest revenue hit in the quarter, falling 14.3 per cent, while the less-than-truckload segment's profits were down the most at nearly 67 per cent despite a 20.5 per cent increase in revenues.

The largest segment — package and courier — earned $12.9 million on $306.6 million of revenues, compared with $17.2 million on $304.1 million a year ago.

Although business conditions remain challenging due to the weak economy, the company said it was encouraged by signs of firmer pricing in less-than-truckload and truckload segments.

Walter Spracklin of RBC Capital Markets said the results were negative despite positive trucking pricing trends.

"While severe weather impeded operating progress in the first quarter, we are optimistic that management can overcome these setbacks given recent actions to reduce exposure to unprofitable businesses and ongoing restructuring initiatives in traditional trucking operations," he wrote in a report.

Spracklin added that unchanged market conditions should result in cost controls, efficiency gains and acquisitions that should drive earnings growth in 2014.

On the Toronto Stock Exchange, TransForce shares closed down eight cents to $24.58 in Thursday morning trading.

Follow @RossMarowits on Twitter.

The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX13978.66+110.31
S&P CDNX547.04+4.59
S&P 5002013.43+17.60
CDN Dollar0.7692+0.0007
Natural Gas2.484-0.014

Okanagan Companies
Pacific Safety0.23+0.01
QHR Technologies Inc1.23-0.02
Metalex Ventures0.05+0.00
Russel Metals21.55-1.57
Copper Mountain Mining0.61-0.02
Colorado Resources0.07-0.01
ReliaBrand Inc0.0166+0.0135
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.08-0.01
Decisive Dividend Corp3.11-0.10
Diamcor Mining0.94+0.06



2247225619 South Crest Drive
5 bedrooms 3 baths
more details
Click here to feature your property
Please wait... loading

Income for life?

Photo: Thinkstock.comIn almost every conversation I have with clients these days, the topic swings to interest rates. What direction they’re going, how long will they stay where they are and how...

Perfect (reno'd) home

Photo: Thinkstock.comHow many times have you found a home in the perfect location, but it needs too much work as per the home inspection? There is a great program available through most lenders that w...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council