TransForce Inc. (TSE:TFI), a logistics and trucking company operating across Canada and the U.S., reported a better-than-expected second-quarter earnings as growth in package and courier and less-than-truckload business outstripped weakness in rig moving activities. Shares gained.
Excluding the after-tax effect of changes in the fair value of derivatives and net foreign exchange gain or loss, earnings per share for the three months ended June 30 rose to 39 cents from 38 cents in the year-earlier period, the Saint-Laurent, Quebec-based company said in a statement on Monday. That surpassed the 36 cents a share estimate of 10 analysts polled by Thomson Reuters I/B/E/S.
Revenue retreated 2.4 percent to $792.3 million due to "continued weakness in rig moving activities of the energy sector," the company said. Analysts had predicted $809 million in revenue.
"Services to the Energy sector remained considerably affected by the severe decline in drilling activity in North America and we have taken proactive measures to better align supply to new demand levels," Chief Executive Officer Alain Bédard, 59, who took over in 2009, said in the statement.
Net income in the April-to-June period declined to $26.6 million from $34.1 million.
Revenue from the package and courier division rose to $327.5 million from $294.2 million, and revenue from the less-than-truckload division edged up to $165.5 million from $164.3 million.
Free cash flow, a key measure of the company's ability to reimburse debts and repurchase common shares, jumped to $91.1 million from $58 million. The company said it bought back shares valued at $14.7 million in the second quarter.
TransForce said it agreed to take over E.L. Farmer & Co., an Odessa, Texas-based provider of pipe storage and hauling services for the oilfield industry. The deal, to complete in the third quarter, may generate annual revenues of $70 million, according to the statement.
The shares advanced 0.4 percent to C$20.64 at 2:05 p.m. in Toront on Monday, giving the company a market value of C$1.9 billion. The stock has extended gains over the past twelve months to 17 percent, compared with a 7.5 percent gain for the S&P/TSX Composite index (TSE:OSPTX).