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 PALO ALTO, Calif., Oct. 19 /PRNewswire/ -- Consolidated Freightways Inc. (NYSE: CNF) today reported third quarter net income of $12.4 million for common shareholders, or 35 cents per share (31 cents fully diluted). The results compare to a loss of $3.3 million, or 9 cents per share, in the same quarter a year ago. The quarterly results included $1.2 million, or 3 cents per share benefit from the effect of the federal tax rate change on deferred taxes.
 Revenues in the third quarter increased to $1.07 billion compared to revenues of $1.04 billion in the third quarter last year. Operating income for the quarter totaled $38.4 million up 116 percent from $17.8 million last year.
 For the first nine months of the year, the company reported net income of $19.5 million compared to a loss of $9.1 million for the first three quarters a year ago. The loss last year was before the cumulative adjustment relating to the 1992 adoption of Statement of Financial Accounting Standards No. 106 concerning post-retirement benefits.
 Revenues in the first nine months of 1993 were $3.08 billion, up 1.6 percent. Operating income of $85.1 million in the period increased 89 percent over the first nine months of 1992.
 Donald E. Moffitt, president and chief executive officer, attributed the significant improvement in profits to a continued strong performance by the company's air freight unit, Emery Worldwide, continued earnings strength at the Con-Way regional trucking companies, and price stabilization in the long-haul trucking market served by CF Motorfreight.
 Moffitt noted that the company continued to improve its capital structure with a reduction in long-term obligations in the quarter of $45.4 million. Taking advantage of lower interest rates, the company completed a $32 million refinancing of bonds related to Emery's Dayton, Ohio, hub facility, with future annual interest savings of $3 million.
 CF MotorFreight reported operating income in the period of $12.7 million, up 10.4 percent from the third quarter a year ago. Revenues were $536.0 million, down 4.5 percent from last year's third quarter.
 Moffitt said that the improved CF MotorFreight results were attributable to a more favorable pricing environment related to a 2 percent rate discount rollback, which the company implemented on Aug. 2. Productivity measures were improved in key areas of freight handling while expense controls continued to yield benefits, he noted.
 "Although CF MotorFreight had a tonnage decline in the quarter, the company is successfully implementing its strategy of emphasizing bottom- line profits versus market share," said Moffitt. "While it is a delicate balance that must be managed almost daily, it is clear that this strategy, combined with productivity improvement and the discount rollback, is working."
 Total tonnage for CF MotorFreight in the quarter decreased 3.6 percent while higher-rated, less-than-truckload tonnage decreased 3.4 percent.
 Con-Way Transportation Services, which operates regional LTL trucking and intermodal truckload businesses, reported operating income of $17.8 million, an increase of 32 percent over the third quarter last year. Revenues in the quarter were $214 million, up 14 percent.
 Moffitt noted that the Con-Way regional carrier group continued to provide strong profit contributions. Significant new business was gained from Con-Way Southern Express' expansion earlier this year in Florida, and from a joint service agreement between CSE and Con-Way Southwest Express, which added next-day and second-day service in key market lanes between the two regions.
 "Customer response to these strategic expansions has exceeded expectations," Moffitt said.
 Also in the quarter, CTS announced an exclusive agreement with The Pallet Reefer Company to market its patented refrigerated shipping technology in the Con-Way regional carrier networks, establishing new capability at Con-Way to efficiently transport refrigerated goods shipments.
 Total tonnage in the quarter for Con-Way Transportation Services increased 30.5 percent while the higher-rated, less-than-truckload tonnage was up 15.3 percent.
 Emery Worldwide reported third quarter operating income of $7.9 million, compared to a loss in last year's third quarter of $7.2 million. All of the profit improvement occurred in Emery's commercial freight operations, both internationally and domestically.
 Air freight revenues were $317 million, up 9.5 percent from 1992 third quarter revenues of $289.4 million.
 Emery's third quarter results came after accrual of $5.1 million for a special incentive compensation plan in which nearly 7,000 employees participate. The plan is contingent on air freight operations being profitable for the full year.
 Moffitt noted that Emery, which was CF's most profitable operating component in September, has made a remarkable turnaround in large measure because of the efforts of employees, who have been motivated by their ability to share directly in the company's profits.
 "Their accomplishments over the past 18 months are extraordinary and unprecedented in the air freight industry," Moffit said. "Emery's profit improvement has averaged approximately $50 million a year since 1991 from employees working for the most part with no wage increases."
 "The work of these employees has dramatically improved Emery's value to shareholders," he said.
 Consolidated Freightways Inc. is a diversified freight transportation company with businesses in long-haul and regional trucking, air freight, intermodal services, customs brokerage and logistics management.
 Condensed Statements of Consolidated Operations
 (Dollars in thousand except per share amounts)
 Three months ended Sept. 30,
 1993 1992(a)
 CF MotorFreight $ 536,047 $ 561,493
 Con-Way Transportation Services 213,989 186,974
 Emery Worldwide 316,967 289,376
 Total $1,067,003 $1,037,843
 Operating income (loss)
 CF MotorFreight $ 12,700 $ 11,502
 Con-Way Transportation Services 17,799 13,472
 Emery Worldwide 7,949 (7,155)
 Total 38,448 17,819
 Other expense, net (6,770) (9,485)
 Income before income taxes 31,678 8,334
 Income taxes 14,599 6,771
 Net Income 17,079 1,563
 Preferred stock dividends 4,697 4,832
 Net income (loss) applicable
 to common stock $ 12,382 $ (3,269)
 Average common shares
 outstanding 35,432,410 35,213,825
 Primary Earnings (loss) per
 common shares $ 0.35 $ (0.09)
 Fully diluted earnings (loss)
 per common share $ 0.31 $ (0.09)
 (a) Restated for the prospective adoption, effective Jan. 1, 1992, of SFAS 106 in the fourth quarter.
 (Dollars in thousands except per share amounts)
 Nine months ended Sept. 30,
 1993 1992 (A)
 CF MotorFreight $ 1,580,128 $ 1,646,224
 Con-Way Transportation Services 600,889 542,472
 Emery Worldwide 899,191 842,541
 Total $ 3,080,208 $ 3,031,237
 Operating Income (Loss)
 CF MotorFreight $ 29,210 $ 39,250
 Con-Way Transportation Services 52,178 41,659
 Emery Worldwide 3,725 (35,791)
 Total 85,113 45,118
 Other Expense, Net (21,017) (33,148)
 Income before income taxes,
 extraordinary charge and cumulative
 effect of accounting change 64,096 11,970
 Income Taxes 30,357 1,428
 Net income before extraordinary
 charge and cumulative effect of
 accounting change 33,739 10,542
 Extraordinary charge from early
 retirement of debt, net of related
 income tax benefits of $4,561 -- 7,428
 Cumulative effect of change in
 method of accounting for post
 retirement benefits, net of
 related income tax benefits
 of $42,699 -- 69,991
 Net income (Loss) 33,739 66,877
 Preferred Stock Dividends 14,193 12,227
 Net Income (Loss) Applicable
 to Common Stock $ 19,546 $ (79,104)
 Average Common Shares Outstanding 35,398,707 35,181,454
 Primary Earnings (Loss) Per
 Common Share:
 Income (loss) before extra-
 ordinary charge and cumulative
 effect of accounting change $ 0.55 $ (0.05)
 Extraordinary charge -- (0.21)
 Cumulative effect of accounting
 change -- (1.99)
 Net income (loss) $ 0.55 $ (2.25)
 Fully Diluted Earnings (Loss)
 Per Common Share:
 Income (loss) before extra-
 ordinary charge and cumulative
 effect of accounting change $ 0.48 $ (0.05)
 Extraordinary charge -- (0.21)
 Cumulative effect of accounting
 change -- (1.99)
 Net income (loss) $ 0.48 $ (2.25)
 (A) Restated for the prospective adoption, effective Jan. 1, 1992, of SFAS No. 109 and SFAS No. 106 in the second and fourth quarters, respectively.
 -0- 10/19/93
 /CONTACT: J.R. Allen of Consolidated Freightways, 415-494-2900/

CO: Consolidated Freightways Inc. ST: California IN: TRN SU: ERN

TB-TM -- SJ005 -- 4208 10/19/93 16:59 EDT
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Date:Oct 19, 1993

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