AIRBORNE ANTICIPATES 4TH-QUARTER LOSS, RATE INCREASES
Airborne Inc., the holding company of Airborne Express, said it anticipates reporting a fourth-quarter loss, due to higher operating costs and poorer than expected results from its core domestic product.
The company anticipates reporting of loss of 23 to 33 cents per share for the period ending Dec. 31, said Robert Cline, chairman and chief executive officer. The company anticipates net operating earnings of 21 to 31 cents per share when final fourth-quarter and year-end results are reported Jan. 31.
Domestic shipments grew 3.5 percent over the year-earlier quarter, due to solid growth in its airborne@home product, which exceeded management's goal of an average 65,000 shipments per day.
'However, due to the greater than anticipated volume, we incurred additional costs in fulfilling the service requirements of customers, leading to increased operating costs in the quarter,' said Lanny Michael, Airborne's chief financial officer.
The company said it saw a drop in its core domestic product due to the slowing economy. It also blamed weather-related expenses and higher fuel costs — up 49 percent over the year-earlier quarter — for increased operating costs.
Airborne will announce a rate increase in the next few weeks, which will include a rate hike affecting one-third of its domestic business, to take effect Feb. 15.
Additional rate increases covering 'most of the remainder of the domestic business over the next several quarters,' said Carl Donaway, president and chief operating officer. 'Additionally, we intend to refine the pricing of our @home product to more accurately match the service levels involved in the delivery of that business.'