Shipping Slowdown Sinks UTi Earnings

The slowdown in worldwide shipping volumes has hurt the freight-logistics firm UTi Worldwide(UTIW Quote) more than Wall Street was expecting.

The company reported worse-than-expected first-quarter results Thursday morning, and its shares fell sharply in response.

UTi's stock was trading Thursday morning at $12.72, down 73 cents, or 5%, on heavier-than-average volume.

In the latest period, which ended on April 30, UTi said it earned $9.8 million, or 10 cents a share, on revenue of $768.4 million, well below analysts' expectations of nearly $938 million. Those top- and bottom-line figures were off sharply -- 27% and 35%, respectively -- from a year ago.

The company, based on the island of Tortola, in the British Virgin Islands, said its earnings figures included mutually offsetting charges and gains (restructuring costs on the one hand, the sale of real estate in South Africa on the other). Analysts, who normally exclude such one-time items in order to judge a company's operational performance, were looking for earnings of 14 cents a share in the quarter.

In addition to "macroeconomic conditions," the company also blamed currency fluctuations for its diminished results. On the bright side, UTi said it was able to spend less during the quarter, cutting expenses by 20% to about $292 million from the year-ago period.

The company's chief executive, Eric Kirchner, said in a statement that he wants to heighten the company's sales efforts "to improve revenue growth." He wasn't more specific about what that might entail, but said, "These efforts may take some time."