The London Olympics begin today. Swimming, gymnastics, track and field…pick, pack, and ship, the 100-mile delivery, the perfect order relay…
- Manhattan Associates Reports Record Second Quarter Revenue and Earning
- Ryder Reports Second Quarter 2012 Results
- C.H. Robinson Reports Second Quarter Results
- UPS 2Q Earnings Per Share Up 7.5 Percent
- JDA Software Announces Reseller Agreement with Strategix International GmbH in Russia
- HighJump TrueCommerce EDI Solutions Delivers Web-Based EDI Integration for Microsoft Dynamics GP
- ATA Truck Tonnage Jumped 1.2% in June
- ATA Files Opening Brief in Challenge of Unwarranted HOS Changes
- CSA’s New Crash Weighting Research Plan
- China’s solar companies warn of trade war with EU (Reuters)
- WTO to Probe China’s Rare-Earth Policies (Wall Street Journal)
The financial results announced this week were mostly positive, with some caution thrown in. You can read the press release for all of the details, but here are some highlights for each company:
Manhattan Associates: Record total revenue of $93.6 million in Q2’12, up almost 6 percent from Q2’11. GAAP diluted earnings per share was a record $0.70 compared to $0.57 in Q2’11. License revenue, however, decreased 6.1 percent in the quarter compared to the previous year (but up 28.2 percent for the first six months compared to last year). The company also raised its full-year EPS guidance and announced that Eddie Capel will succeed Pete Sinisgalli as CEO effective January 1, 2013.
Ryder: Total revenue for Q2’12 increased 3 percent to $1.56 billion compared to Q2’11. Comparable earnings per diluted share from continuing operations increased 9 percent compared to Q2’11. Total revenue in the quarter for the Supply Chain Solutions (SCS) business segment was $570.3 million, up 6 percent from the same period last year. SCS total revenue and operating revenue comparisons benefited from increased automotive volumes and new business; increased dedicated contract carriage activity; and comparisons with the year-earlier period, which included automotive production cuts related to the natural disasters in Japan. The company also raised its full-year 2012 comparable earnings forecast to $3.75 to $3.90 per share, up from the previous range of $3.65 to $3.85.
CH Robinson: Total net revenues and diluted EPS increased 1.8 percent and 6.0 percent, respectively, in the second quarter compared to Q2’11. Net revenues were down in Truck (-0.5%), Intermodal (-7.8%), and Air (-7.5%), but up in Ocean (3.4%) and Other Logistics Services (26.7%), which include transportation management services, customs, warehousing, and small parcel. Truckload volumes increased approximately ten percent in the second quarter of 2012 compared to Q2’11 and the company’s truckload net revenue margin decreased in the second quarter compared to last year due to its cost per mile rising faster than its price per mile.
UPS: Total revenue increased 1.2 percent and diluted EPS increased 7.5 percent in Q2’12 compared to the previous year. U.S. Domestic revenue increased 4.1 percent over the prior-year period, while International Package revenues declined 4.1 percent (driven by double-digit declines in exports from Asia to the U.S. and Europe) and Supply Chain and Freight revenues declined 1.6 percent due to slowing International Air Freight demand and lower pricing. Forwarding continues to experience pressure on pricing, especially out of Asia, as excess capacity in the marketplace continues. “Increasing uncertainty in the United States, continuing weakness in Asia exports and the debt crisis in Europe are impacting projections of economic expansion,” said Scott Davis, UPS chairman and CEO. As a result, the company reduced its guidance for 2012 diluted earnings per share.
My main takeaway from these results (and those announced previously) is that demand for supply chain software and contract logistics services remains relatively strong, while freight forwarding and international shipping operations face continued uncertainty and volatility.
The American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.2 percent in June after falling 1.0 percent in May. For the quarter, the index was up 3.5 percent compared to Q2’11, but down 0.8 percent compared to Q1’12, the first quarterly decrease in a year. “June’s increase was a pleasant surprise, but the lower year-over-year gain fits with an economy that has slowed,” ATA Chief Economist Bob Costello said. Costello lowered his tonnage outlook for 2012 to the 3% to 3.5% range due to recent economic weakness.
The Federal Motor Carrier Safety Administration (FMCSA) and China remain on the defensive. Last week we reported how OOIDA filed a suit against FMCSA over its Pre-Employment Screening Program and the DataQ appeal process. The Alliance for Safe, Efficient and Competitive Truck Transportation (ASECTT) also filed a suit last week against the FMCSA (see yesterday’s guest commentary). This week it was the ATA’s turn to challenge the FMCSA. The ATA filed a brief with the U.S. Court of Appeals for the District of Columbia Circuit challenging the Hours of Service (HOS) changes. Here’s a quote from the press release:
In its brief, ATA calls FMCSA’s changes “arbitrary and capricious as well as unwarranted.”
“The agency claims that restart restrictions and the off-duty break requirement are justified by the cost-benefit analysis in FMCSA’s Regulatory Impact Analysis. That ‘analysis,’ however, is a sham,” the brief said. “FMCSA stacked the deck in favor of its preferred outcome by basing its cost-benefit calculations on a host of transparently unjustifiable assumptions. FMCSA therefore cannot justify the 2011 final rule on the ground that it has net benefits.”
Meanwhile, China faces continued pressure over its trade policies, specifically with regards to rare-earth materials and solar industry. As reported in the WSJ, “The World Trade Organization has set up a panel to probe China’s rare-earth export policies, a widely expected move following requests by the U.S., the European Union and Japan.” And according to a Reuters report, “Companies led by Germany’s SolarWorld have asked the European Union to investigate claims that Chinese rivals had been selling their products below market value in Europe. The European Commission…has 45 days to decide if it will start an investigation.” The goal, presumably, is to follow in the footsteps of the United States, which started imposing a 31 percent duty on solar panel imports from China back in May. Here what Wang Yiyu, Yingli Solar’s chief strategy officer, said at a briefing by leading Chinese solar companies:
“If the EU were to follow the precedent of the U.S. and launch an anti-dumping investigation on Chinese solar products, the Chinese solar industry would suffer a fatal blow. The investigation would also trigger a wholescale trade war between China and the EU, which would cause huge losses to both parties.”
A swimming competition between the FMCSA and its challengers to settle their differences? A 100-meter dash between the US, EU, and China? Let the Games begin!
Song of the Week: “Strange Attractor” by Animal Kingdom. “And it must be chemical…”
(Note: CH Robinson, HighJump Software, JDA Software, Manhattan Associates, and Ryder are ARC clients and/or Logistics Viewpoints sponsors).