Preston Corp., a trucking company based on Maryland's Eastern Shore, yesterday reported losses in the third quarter and first nine months as it paid the costs of closing two unprofitable subsidiaries and laying off nearly 1,000 of its more than 9,000 employees.
The company took $17.8 million out of its bottom line in shutting down Pioneer Transportation Systems Inc. in Hurlock, Md., and Reeves Transportation Co. in Calhoun, Ga.
The two trucking lines had depended on shipments of auto parts and carpets -- two industries facing their own problems with declining sales.
As a result, Preston lost $18.4 million in the first nine months, compared with a $3.4 million (58 cents a share) profit in the same period a year ago.
Revenue rose almost 8 percent in the first nine months, to $499.9 million from $464.2 million.
In the third quarter, the company, which has its headquarters in the Caroline County town of Preston, lost $19.45 million, compared with a profit of $161,000 (3 cents) in the 1989 third quarter.
Revenue rose 10.5 percent, to $171.5 million from $155.2 million.
Preston has been losing money since last fall and winter because of rising fuel costs and intense competition in the trucking industry, but company officials said closing Reeves and Pioneer will help the company reduce debt and interest payments and improve cash flow.
"We are anticipating a profitable fourth quarter that, in an uncertain economy, should be a positive indicator of the earnings improvement that is possible in the coming year," the company said in a statement.
"Preston ... will now devote its resources to its other subsidiaries, which are doing very well in the short-haul, less-than-truckload segment of the trucking industry," the company said.
Washington Federal Savings Bank, a District-based thrift, said its earnings fell almost 68 percent in its fiscal first quarter, ended Sept. 30, as it sharply increased its additions to reserves against potential loan losses.
The savings bank said it earned $191,000 (6 cents) in the quarter, compared with $593,000 (20 cents) in the same quarter a year ago.
Last year's results also included a $200,000 gain from carrying forward tax losses.
Its assets stood at $1.11 billion as of Sept. 30, down slightly more than 2 percent from $1.13 billion at the same point a year earlier.
The bank added $119,000 to its loan-loss reserves in the quarter, compared with a $64,000 addition in the year-ago quarter.