U.S. trucking and logistics company Con-way Inc expects quarterly operating income at its key less-than-truckload division to fall by about a third due to higher healthcare costs.
Con-Way expects the unit, Con-Way Freight, which contributes about 60 percent of revenue, to post fourth-quarter operating income of about $2 million, down 29 percent, it said in a statement.
The San Mateo, California-based company expects Con-way Freight to report fourth-quarter revenue of $736 million, up 6 percent from a year ago.
Health care costs rose by $11 million on a sequential basis in the fourth quarter, outpacing benefits gained from reduced operating costs and higher pricing, the company said.
The company said future health care costs are likely to remain uncertain, but added its new health care plan options and benefit changes would help mitigate future increases. (Reuters)