Pacer Int'l shares soar 20 percent as co. settles Union Pacific dispute, turns 3Q profit
Associated Press
11/03/09 8:00 PM EST
CONCORD, CALIF. — Shares of Pacer International Inc. jumped nearly 20 percent in Tuesday aftermarket trading after the logistics services provider said it has resolved a dispute with Union Pacific and turned a surprise profit in the third quarter.
The deal with Union Pacific extends and expands terms for big-box shipments under an agreement that would have expired in 2011. It also resolves claims between the two companies over domestic container transportation. Pacer said Union Pacific paid it $30 million under the new agreement, which Pacer will use to pay down a credit line by about 50 percent.
Pacer also reported that its third-quarter profit dropped to $600,000, or 2 cents per share, for the quarter ended Sept. 30, from year-ago earnings of $20.8 million, or 59 cents per share. Revenue fell 25 percent to $418.7 million from $557.8 million as the economic slump curbed freight demand.
But the results topped estimates of analysts surveyed by Thomson Reuters, who had expected Pacer to lose a penny per share on revenue of $402.6 million.
Pacer shares had risen 15 cents, or 5.9 percent, to close at $2.71 before the announcement. They jumped another 54 cents, or 19.9 percent, to $3.25 in late trading.
