But analysts say the troubles with those aircraft are really a symptom of deeper problems in Emery's foundation domestic freight business, an integrated all-cargo business under siege in the air and, in particular, on the ground. Emery's North American revenue was down 7 percent and its core-market tonnage fell 9 percent from the same quarter a year ago. Others peg the losses lower and the company doesn't break out such figures, but the revenue and the operating margins for Emery's postal and international forwarding businesses are the clear breadwinners for the company. Emery's shipment count plunged 18 percent in the quarter while its average shipment weight soared 19 percent. Most analysts argue that fewer, heavier shipments aren't the way to profitability in the freight transport business.
Emery is in trouble, but they can do it.
The latest numbers put added pressure on Emery's new president, Chutta Ratnathicam, to act quickly and industry observers believe the initial changes Ratnathicam imposed in his first few weeks are harbingers of greater changes to come once the peak shipping season is over. For the first time in nearly a decade, Wall Street is openly speculating about a possible sale or more drastic action. Emery's corporate parents have show patience with the company in the past and seen that pay off. Ratnathicam's initial steps were more measured, including the replacement of John Zarras as vice president of North America with Eric Kirchner, Emery's former Western Division vice president. Ratnathicam has a reputation as a cost cutter, but he is looking at more than just reining in spending.