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Quality Distribution Says Economy Hurt Bottom Line

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By TED JACKOVICS, The Tampa Tribune

Published: February 13, 2008

Updated: 02/12/2008 08:44 pm

TAMPA - The poor economy continues to take its toll on trucking companies as Tampa-based Quality Distribution estimated Tuesday that it would record a $15.5 million fourth quarter pretax loss and a $9.7 million pretax loss for all of 2007.

"The weakening economy, particularly the construction and automotive sectors, had a negative effect on growth and profitability throughout the quarter and the year," said Gary Enzor, president and chief executive of the tank truck company, which operates more than 3,300 tractors and 7,500 trailers nationwide.

Still, Enzor held out hope in a news release that things would improve in 2008 for Quality.

"Based on the start-up of new contracts in February, and the closing of two small acquisitions, we believe we will see further top-line revenue growth in our trucking business throughout the year," he said.

That same optimism for 2008 is not shared by others who follow the trucking industry.

Analysts predicted that four national trucking companies based in Arkansas, including J.B. Hunt Transport Services, would suffer continued earnings declines in 2008 because of a "freight recession," according to The Arkansas Democrat-Gazette.

And FedEx Corp. reported at the end of December that the demand for freight shipping is "severely restrained" by the weak national economy.

In addition to factors related to the national economy, Quality Distribution noted $8.4 million in various charges for the fourth quarter that ended Dec. 31. Those included a $4.8 million charge involving several large casualty claims.

The predicted $15.5 million, fourth quarter pretax loss compared with pretax earnings of $1.2 million for the year-ago period. And the predicted $9.7 million pretax loss for all of 2007 compared with pretax income for 2006 of $18.2 million.

Quality's shares closed down 44 cents to $4.03 Tuesday on the Nasdaq stock exchange.

Reporter Ted Jackovics can be reached at tjackovics@tampatrib.com or (813) 259-7817.

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