October 28, 2010 / 9:06 PM / 8 years ago

UPDATE 1-TransForce Q3 earnings up on demand for niche services

* Q3 adj EPS C$0.24 vs est C$0.22

* Q3 rev C$499.5 mln vs est C$516.1 mln

* Says recovery not as robust as expected

Oct 28 (Reuters) - North American trucker TransForce Inc’s TFI.TO quarterly earnings rolled in above analysts’ expectations fuelled by demand for its package, courier and specialized services.

Net income rose to C$25.4 million, or 27 Canadian cents a share, from C$17 million, or 19 Canadian cents a share, a year ago.

On an adjusted basis, TransForce earned 24 Canadian cents, coming in above analysts’ estimates of 22 Canadian cents, according to Thomson Reuters I/B/E/S.

Third-quarter revenue rose 11 percent to C$499.5 million, but trailed consensus of C$516.1 million.

“The economic recovery is not as robust as some predicted,” Chief Executive Alain Bedard said in a statement.

While its package delivery segment contributed 39 percent and specialized services added 21 percent to total revenue, inputs from its main truckload (TL) and less-than-truckload (LTL) units remained unchanged.

As the economic slowdown curbed shipment volumes in its TL and LTL segments, TransForce had cut costs and steered towards higher-margin segments like package and courier delivery, and waste management and oilfield services.

Last week saw a host of U.S. trucking companies post steady profits on improving trends in pricing due to a fall in truck capacity. [ID:nSGE66K0L4]

But analysts expect pricing in Canada to lag the United States in both the TL and LTL segments.

Earlier in the day, trucking peer Mullen (MTL.TO) posted a quarterly income that topped estimates, helped in part by a pick-up in oilfield activities in western Canada. [ID:nSGE69Q0OF]

Montreal-based TransForce’s shares have gained about 15 percent since it won a three-year courier-services contract with the Government of Ontario late September. They closed at C$11.66 Thursday on the Toronto Stock Exchange. (Reporting by Gowri Jayakumar in Bangalore; Editing by Roshni Menon)

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