UTi Worldwide Q2 Results Miss Estimates

(RTTNews) - Supply chain services company UTi Worldwide, Inc. (UTIW) reported Thursday a loss for the second quarter that sharply widened from last year, reflecting lower operating margins and revenue declines in both freight forwarding as well as contract logistics and distribution. Adjusted loss per share came in wider than analysts' expectations, and quarterly revenues missed their estimates.

"We recorded solid progress in the second quarter with net revenues, adjusted EBITDA and free cash flow all improving on a year-over-year basis. On a constant-currency basis, our overall net revenue rose 5.5 percent in the second quarter compared to the same period last year," CEO Eric Kirchner said.

The Road Town, the British Virgin Islands-based company reported a net loss of $16.94 million or $0.19 per share for the second quarter, sharply wider than $4.44 million or $0.04 per share in the prior-year quarter.

Excluding items, adjusted net loss for the quarter was $4.21 million or $0.07 per share, compared to adjusted net income of $5.47 million or $0.05 per share in the year-ago quarter.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.01 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter declined 3.4 percent to $1.09 billion from $1.13 billion in the same quarter last, and missed seven Wall Street analysts' consensus estimate of $1.14 billion.

Net revenues, excluding purchased transportation costs, decreased 4 percent to $401.24 million from last year's $385.65 million.

On an organic basis, revenues decreased 2.7 percent, while net revenues grew 5.5 percent from last year.

Freight forwarding revenues declined to $708.04 million from $768.80 million, and contract logistics and distribution revenues also decreased to $383.20 million from $360.62 million last year.

Operating income for the quarter declined to $7.08 million from $10.08 million in the prior-year quarter, and total operating expenses were $1.08 billion, down from $1.12 billion in the year-ago quarter.

Adjusted operating margin for the quarter contracted 120 basis points to 2.2 percent from last year's 3.4 percent.

"Transformation-related cost reductions continued at an annualized pace of approximately $50 million through the end of the second quarter. We remain on track to achieve $95 million in annualized cost savings by the end of fiscal 2015. As a result, we are targeting EBITDA in fiscal 2016 in the range of $190 million to $210 million, with results improving throughout the year," Kirchner added.

UTIW closed Wednesday's regular trading session at $9.07, down $0.04 on a volume of 1.35 million shares. In the past 52-week period, the stock has been trading in a range of $9.00 to $17.70.