UTi Worldwide Q2 Results Miss Estimates

(RTTNews) - Supply chain services company UTi Worldwide, Inc. (UTIW) reported Friday a loss for the second quarter compared to a profit last year, reflecting lower operating margins and revenue declines in both freight forwarding as well as contract logistics and distribution. Both adjusted earnings per share and quarterly revenues missed analysts' expectations.

"Our results in the fiscal 2014 second quarter continue to reflect a lackluster global economy, challenging trading conditions and costs associated with our comprehensive business process transformation. The results underscore the importance of completing our transformation, and we have continued to make significant progress in that area," CEO Eric Kirchner said.

The Road Town, the British Virgin Islands-based company reported a net loss of $4.44 million or $0.04 per share for the second quarter, compared to net profit of $18.88 million or $0.18 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $5.47 million or $0.05 per share, compared to $21.09 million or $0.21 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter declined 4.5 percent to $1.13 billion from $1.18 billion in the same quarter last, and missed ten Wall Street analysts' consensus estimate of $1.15 billion.

Net revenues, excluding purchased transportation costs, decreased 5 percent to $385.65 million from last year's $406.07 million.

On an organic basis, revenues decreased 2.2 percent, and net revenues declined 1.6 percent from last year.

Freight forwarding revenues declined to $768.80 million from $797.38 million, hurt by lower pricing, partially offset by a modest increase in volumes.

Contract logistics and distribution revenues also decreased to $360.62 million from $385.56 million, reflecting the impact of currency translation, as well as the exit of underperforming business in Europe and conclusion of certain high-margin accounts.

Operating income for the quarter plunged to $10.08 million from $33.03 million in the prior-year quarter, and total operating expenses were $1.12 billion, down from $1.15 billion in the year-ago quarter.

Adjusted operating margin for the quarter contracted 530 basis points to 3.4 percent from last year's 8.7 percent.

The company also announced that it has launched a new freight forwarding operating system since July 1 in seven countries, including the U.S., the U.K. and Hong Kong. There are currently 22 countries on the system to-date.

"The 22 countries on the new system represent approximately 35 percent of total freight forwarding shipments. We continue to expect that more than 70 percent of shipments will be on the new system by the end of fiscal 2014," Kirchner added.

UTIW closed Thursday's regular trading session at $17.05, down $0.10 on a volume of 0.43 million shares. In the past 52-week period, the stock has been trading in a range of $12.31 to $17.62.