Nov. 3, 2009 (PR Newswire) -- SAN MATEO, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Con-way Inc. (NYSE: CNW) today reported net income available to common shareholders for the third quarter of 2009 of $13.5 million, or 27 cents per diluted share. The results compare to third-quarter 2008 net income available to common shareholders of $38.8 million, or 81 cents per diluted share.

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The 2009 third quarter included the effect of a change in accounting estimate related to revenue adjustments at Con-way Freight and a charge for certain discrete tax items, which reduced net income by 7 cents and 5 cents per diluted share, respectively. Excluding these items, 2009 third-quarter earnings per diluted share were 39 cents.

The 2008 third quarter results reflected the effect of preferred stock dividends. The company subsequently converted its preferred stock to common stock on June 30 this year.

Operating income in the 2009 third quarter was $41.1 million compared to $78.9 million earned in the third quarter a year ago. Revenue in the 2009 third quarter was $1.13 billion, down from last year's third-quarter revenue of $1.37 billion as the recessionary economy curtailed demand for services.

Commenting on the quarter, Con-way President and CEO Douglas W. Stotlar said, "Our operating companies have adjusted to the resetting economy. Overall, the business environment continues to present formidable challenges, characterized by weak demand, excess capacity and pricing pressure. We expect these conditions to persist in the near term, diminishing the prospects for earnings growth."

Con-way Freight continued to post sequential quarter-to-quarter 2009 tonnage growth while yield and profits declined due to several factors. "We made a strategic decision, implemented over the past two quarters, to improve network utilization and we met this objective," noted Stotlar. "Profits were constrained due to pricing levels, higher variable operating costs associated with the tonnage growth and lower fuel surcharge revenues. While pricing is likely to remain under pressure, we believe the increased network volumes put us in a better position competitively; we are now instituting specific measures to improve operating efficiency."

Menlo Worldwide Logistics produced a second consecutive quarter of solid operating results. "Menlo did a superb job managing its costs," Stotlar said. "These results speak to the consistent, successful execution of its business model, particularly in the 4PL segment and with its multi-client warehousing operations. Menlo continues to enjoy a strong sales pipeline and an excellent win rate on new projects, which has helped offset business declines from existing clients."

Con-way Truckload performed well in the quarter, effectively managing near-term market challenges while expanding its service portfolio. "Profits were reduced by an asset disposition loss. Excluding this, Con-way Truckload turned in a commendable operating profit in a soft market," Stotlar noted. "Costs remain well-controlled, asset utilization is improving and our new regional truckload operation is gaining traction. Con-way Truckload continues to be recognized for its premium service value, which is an excellent foundation for growth," he concluded.

The effective tax rate for the 2009 third quarter was 46.1 percent compared to 36.5 percent in the same period of 2008. The 2009 tax rate was affected by discrete tax items that increased the effective tax rate, while the 2008 tax rate also included discrete tax items, which reduced the effective tax rate.

FREIGHT

For the 2009 third quarter, Con-way Freight, the company's less-than-truckload operation, reported:

--  Operating income of $22.8 million, a decrease of 62.7 percent from the
$61.1 million earned in the year-ago period.  Profitability was
diminished from lower pricing driven by overcapacity in the LTL market,
and higher variable operating costs due to increased tonnage levels. The
2009 third quarter also was affected by a change in accounting estimate
related to revenue adjustments, which decreased income by $5.4 million.
The current-quarter comparison to prior year also was affected by
employee cost reductions implemented in April 2009.
--  Revenue of $692.8 million, a 14.3 percent decline from last year's
third-quarter revenue of $808.3 million.
--  Tonnage per day increased 5.1 percent over the previous-year third
quarter.
--  Yield declined 19.4 percent from the previous-year third quarter,
primarily reflecting the weak pricing environment from industry
overcapacity. Excluding the fuel surcharge, yield declined 10.5 percent.

--  Con-way Freight recorded an operating ratio of 96.8 in the 2009 third
quarter, including the earlier-mentioned charge for the accounting
estimate change.

LOGISTICS

For the third quarter of 2009, Menlo Worldwide Logistics, the company's global logistics and supply chain management operations, reported:

--  Operating income of $9.5 million, a 159 percent increase from $3.7
million earned in the third quarter of 2008.  The results reflected
effective cost controls, ongoing improvements in operating efficiency,
and gain-share income.
--  Revenue of $344.4 million, down 18.0 percent from the previous-year
third-quarter revenue of $419.9 million.