(RTTNews) - Freight transportation and logistics services company Con-way Inc. (CNW: News ) posted a fall in its third-quarter profit, hurt by lower demand for services, and cautioned that the prospects for earnings growth in the near term appears low.

The San Mateo, California-based company posted net income available to common shareholders of $13.5 million or $0.27 per share for the third quarter, down from $38.8 million or $0.81 per share in the prior year quarter.

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.

Excluding the items, the company said its earnings per share were $0.39 for the latest quarter. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.52 per share for the third quarter. Analysts' estimates typically exclude special items.

Operating income for the quarter dropped to $41.1 million from $78.9 million in the previous year quarter.

Con-way President and CEO Douglas Stotlar, said, "Profits were constrained due to pricing levels, higher variable operating costs associated with the tonnage growth and lower fuel surcharge revenues."

Third-quarter revenue declined to $1.13 billion from $1.37 billion in the same quarter last year, as the recessionary economy curtailed demand for services. Ten analysts had a consensus revenue estimate of $1.14 billion for the third quarter.
Revenues for Con-way Freight, the company's less-than-truckload operation, fell 14.3% to $692.8 million. Yield declined 19.4%, mainly due to the weak pricing environment from industry overcapacity. Excluding the fuel surcharge, yield declined 10.5%.

Menlo Worldwide Logistics, the company's global logistics and supply chain management operations, reported revenues of $344.4 million, down 18% from the third quarter of 2008, due to a decline in fuel-surcharge revenue, and significantly lower costs for purchased transportation sourced by Menlo's transportation-management group as the company continued to leverage pricing opportunities with third-party trucking service providers. Excluding purchased transportation expense, net revenues grew 1% to $129.3 million.

Revenue for Con-way Truckload, the company's full-truckload transportation operation, slipped 32% to $95.7 million, after the elimination of $50.6 million in inter-company revenues.

For the nine-month period of 2009, Con-way reported a net loss applicable to common shareholders of $109.0 million or $2.32 per share, compared with $110.0 million or $2.30 per share in the previous year period. Revenues for the year-to-date period slipped to $3.15 billion from $3.91 billion in the prior year period.

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