April 19 (Bloomberg) -- TransForce Inc. fell to its lowest level in more than three months after the logistics and trucking company reported quarterly sales trailing analysts’ estimates and said it doesn’t expect business to improve for the rest of the year.
The stock dropped 2.5 percent to C$19.50 at the close in Toronto, its lowest price since Dec. 28. TransForce has declined 1.8 percent this year.
TransForce, which agreed in January to buy Velocity Express to expand its package-delivery business, said persistent softness in the North American economy affected first-quarter results, as well as more normal seasonal demand compared to a year earlier, according to a statement from the Montreal-based company yesterday.
“As we do not see significant improvement in business conditions before the end of the year, TransForce will continue to focus on unlocking synergies from significant acquisitions made since 2011 and on maximizing return on assets in all segments,” Chief Executive Officer Alain Bedard said in the statement.
First-quarter revenue fell 4.9 percent to C$749.7 million ($731 million), short of the C$785.8 million average estimate, according to data compiled by Bloomberg.
Excluding costs and gains, first-quarter net income was C$24.4 million, or 26 Canadian cents a share, compared to $24.7 million, or 25 cents a year earlier. That matched the average analyst estimate.
Results in the period included “abnormally high” gains of about 7 cents a share on asset sales, Ben Vendittelli, an analyst at Laurentian Bank Securities, said in a note to clients today.
“Though these gains are a recurring part of TransForce’s operations they are typically significantly lower and do not usually have such a material impact on earnings,” Vendittelli said.
Vendittelli, who had a buy rating on TransForce, said today he is placing the stock under review. TransForce “will continue to take a breather in the short-term while economic factors continue to cause headwinds for results,” he said.
Revenue in TransForce’s Canadian rig-moving business, which totaled about C$50 million last year, may drop to about C$20 million in 2013, Bedard said today on a conference call.
“The disaster in our company is the rig-moving business,” Bedard said. “The rig-moving business in Canada, it’s a mess. The market is a mess, the pricing is a mess.”
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