Line-haul loss bites into ABX revenues, earnings
When ABX Air's main customer, DHL, assumed management of its line-haul operation in 2006, it took a chunk of the cargo airline's revenues with it.
ABX posted first-quarter net income of $4.3 million, or 7 cents per share, in line with analysts' expectations, but down from $8.1 million, or 14 cents per share, in the year-ago quarter. Revenues dropped to $288.1 million from $369.2 million in first-quarter 2006.
During the quarter, ABX took a charge of $2.6 million, or 4 cents per share, for a deferred income tax expense. It received $1.3 million, or 2 cents per share, in income from the line-haul operation taken over by DHL.
In early May, the company announced a contract under which it will operate several cargo aircraft for All Nippon Airways in that airline's Asia markets.
"As expected, the 2007 non-cash income tax expense and last year's transition of line-haul to DHL had a significant effect on year-over-year comparisons," said Joe Hete, president and CEO. "On the other hand, our business is better positioned for growth as an independent provider of air cargo services than it was a year ago, and our new agreement with All Nippon Airways launches us into new global markets."
The airline saw growth in its non-DHL segments: charter revenues grew to $7 million during the quarter, from $3.9 million a year ago. Other business, including mail-handling for the U.S. Postal Service and aircraft maintenance services, grew to $8.1 million from $4.5 million in the year-ago quarter.
Shares of ABX (NASDAQ: ABXA) fell 15 cents, to $6.39, in Wednesday morning trading.
ABX Air, headquartered in Wilmington, is a cargo airline with a fleet of 112 aircraft and 18 hubs throughout the United States.