Higher Expenses Lead Airborne to Warn of Q1 Loss

Share this content:
Airborne Inc. said yesterday that it expects to post a quarterly loss because of higher operating expenses and costs related to its merger with DHL Worldwide Express.


Though the No. 3 shipping company saw a rise in U.S. ground shipping volume, bad winter weather, escalating fuel costs and increased corporate costs contributed to unforeseen expenses. As a result, Airborne said it expects to report a net loss of 12 cents to 17 cents a share for the first quarter. Analysts expected a profit of 9 cents a share.


Domestic shipment volumes increased 3.5 percent in the first quarter, thanks to gains in Airborne's ground delivery service, but volume for its air express operation dropped 8 percent.


The Seattle-based company said its average fuel costs were $1.21 a gallon last month and $1.12 a gallon for the first quarter. Last year, gas prices averaged 71 cents a gallon. Also, Airborne's pension and insurance costs increased $5 million and its legal fees rose $6 million because of the planned sale of its ground operations to Deutsche Post for $1.05 billion.


Airborne's earnings warning comes less than a month after it reached a merger agreement with Deutsche Post, which hopes to combine Airborne's ground unit with its DHL Worldwide Express subsidiary. Reuters reported yesterday that the earnings shortfall already had been disclosed and would not affect the deal.


United Parcel Service and FedEx Corp. have lobbied to stop the merger, claiming Deutsche Post's ownership of DHL Worldwide violates U.S. laws related to foreign company ownership of domestic airlines. Deutsche Post has a 25 percent stake in DHL Airways, the maximum allowed under U.S. law.


On Saturday, Congress asked regulators to take a closer look at DHL Airways' ownership structure.


Airborne plans to report its Q1 results April 30.


close

Next Article in Direct Mail

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above