UTI Worldwide, Inc. (UTIW) Misses Q1 EPS by 5c

UTI Worldwide, Inc. (NASDAQ: UTIW) reported Q1 EPS of ($0.09), $0.05 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $1.05 billion versus the consensus estimate of $1.1 billion.

Eric W. Kirchner, chief executive officer, said, "First quarter results were in line with our expectations. Adjusting for negative currency effects, net revenue rose 3.8 percent in the first quarter, primarily due to increased activity in both business segments and an improvement in freight forwarding yields. Freight forwarding volumes grew slightly compared to the first quarter of last year. Net revenue per unit of cargo increased as buy rates improved. Contract logistics and distribution recorded solid revenue growth on a constant-currency basis, due to gains in new and existing accounts in all regions. We continued to win new business in both business segments in the first quarter, which we expect will lead to revenue growth in the second half of this year.

"We made further progress in our transformation activities. We implemented our 1View operating system in five additional countries. This brings to 37 the total number of countries on the new system, representing approximately 77 percent of freight forwarding transactions. We expect to add 8-10 additional countries by September 1, 2014, which would bring us to approximately 85 percent of transactions. We continue to target completion of the system implementation by the end of the third quarter of fiscal 2015."

Kirchner continued, "We plan to achieve $95 million in annualized cost savings by the end of fiscal 2015, which represents the high end of the range of our prior estimates. As previously disclosed, we already took action in fiscal 2014 to remove approximately $50 million of this total. These cost reductions were in place in the first quarter, but we also incurred higher payroll-related expenses and transformation costs, as well as expenses associated with growth in contract logistics and distribution. These higher costs are part of our fiscal 2015 business plan, which also calls for revenue growth and productivity improvements that are independent of the transformation that are expected to fund these cost increases in the second half of the year. As a result, we expect adjusted EBITDA to improve significantly this year as we complete our cost reduction measures and begin to remove duplicative costs associated with the transformation."

For earnings history and earnings-related data on UTI Worldwide, Inc. (UTIW) click here.

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