Quality Distribution Inc, Tampa FL, is updating its earnings guidance for the fourth quarter of 2006 and the full year 2006. The company also is withdrawing its previously announced earnings guidance for 2007, according to company information.
“Although we do not expect to meet our previously announced earnings forecast for the fourth quarter and full year 2006, we still anticipate year-over-year earnings growth in excess of 50% as compared to 2005," said Gerald L Detter, chief executive officer and chairman. "In spite of the lower than expected earnings, we continue to generate strong free cash flow. Our total debt, net of cash, decreased approximately $9 million during the fourth quarter and $15 million as compared to year-end 2005. We continue to believe that the company is much better positioned today than it was as we entered the year and will continue to focus on improving the long-term viability of our company.”
Quality Distribution is revising the outlook for the fourth quarter and full year 2006 downward primarily due to softer than anticipated seasonal demand and an unexpected charge for costs associated with legacy environmental remediation projects.
The company now estimates full year revenue (excluding fuel surcharge) will be in the range of $640 to $645 million, as compared to the previous guidance range of $645 million to $650 million.
Demand, which softened in the fourth quarter of 2006, remains weaker than anticipated, the company said in the news release. Additionally, it has experienced several recent events which may increase the its insurance-related costs in 2007.
As a result, the it is withdrawing its previously released earnings guidance for 2007 and will reassess issuing guidance at such time as it has better visibility on the overall industry demand trends and other factors impacting revenue and profitability.