Deutsche Bank cutting back in the U.S.
Deutsche Bank has been a big economic win for Jacksonville over the past decade, growing into one of the city’s largest employers with about 2,000 jobs.
However, while the previous CEO touted Deutsche Bank’s growth in Jacksonville, new Chief Executive Christian Sewing last week announced intentions to cut back the German bank’s U.S. activities.
Bloomberg News, citing an unnamed source, reported Deutsche Bank fired 400 of its 10,300 U.S. workers last week and the cuts could eventually reach 1,000. It did not say which cities were impacted by the cuts.
Previous CEO John Cryan, on a visit to the offices in August 2016, said he expected continued growth in the Jacksonville operations, which opened in 2008.
However, Cryan was fired three weeks ago after three straight years of losses for Deutsche Bank on his watch, with Sewing promoted to replace him.
In a statement issued Thursday, Sewing said Deutsche Bank will need to cut costs to improve its finances.
“These cutbacks will be painful, but they are unfortunately unavoidable if we want to be sustainably profitable in the best interests of our bank, our clients and our investors,” he said.
Among the changes will be a bigger focus on Europe in the bank’s corporate finance division.
“We will reduce our commitment to sectors in the U.S. and Asia in which cross-border activity is limited,” he said.
Deutsche Bank also will reduce its U.S. securities business, he said.
“Given our results and our share price, it is our imperative to take tough decisions and ensure we implement them in a disciplined way,” Sewing said.
Landstar indicators are pointing up
Landstar System Inc., as expected, reported a big increase in first-quarter earnings.
The Jacksonville-based trucking company Wednesday reported earnings of $1.37 a share, up from 77 cents in the first quarter of 2017, with revenue jumping 35 percent to $1.048 billion.
The big increases were no surprise because Landstar updated its forecast for the quarter four weeks ago.
“Our 2018 first quarter financial performance was by far the best first quarter performance in Landstar history,” CEO Jim Gattoni said in the company’s conference call.
“In our view, the overall environment for Landstar is as strong as it has been in any point over the last two decades and Landstar is firing on all cylinders.”
Landstar is forecasting second-quarter earnings of $1.48 to $1.54 a share, up from 89 cents the previous year. Revenue is forecast between $1.115 billion to $1.165 billion.
Gattoni said Landstar is on track to pass $4 billion in revenue this year for the first time in its 30-year history. Revenue was about $3.6 billion last year.
Patriot reports loss amid rising revenue
Jacksonville’s other publicly traded trucking company, Patriot Transportation Holding Inc., reported a net loss of $188,000, or 6 cents a share, for its second quarter ended March 31.
Total revenue rose 2.1 percent to $28 million but excluding fuel surcharges passed on to customers, transportation revenue fell 1.2 percent to $25.4 million.
“Management is not pleased with the financial results from our business. We will continue to make the necessary improvements to our plan to improve bottom line results,” CEO Robert Sandlin said in Patriot’s conference call.
Patriot’s main business is transporting fuel products. Second-quarter results were impacted by insurance costs for two environmental spills, as well as increases in health insurance expenses.
Compensation costs also rose as Patriot, like other trucking companies, had to increase pay to deal with driver shortages.
“We continue to see high driver turnover, poor applicant flow and lower quality of applicants and we anticipate this challenge to continue for the foreseeable future,” Sandlin said.
Landstar operates differently from trucking companies like Patriot. Instead of employing drivers, Landstar contracts with drivers who own their own trucks to haul freight.
However, Gattoni acknowledged the driver shortage problem in Landstar’s conference call.
“You can bring all the trucks you want but with unemployment about 4 percent, where do the drivers come from?” he said.
So far, the driver issues are not affecting Landstar’s business, he said.
Ceridian IPO jumps at opening
Ceridian HCM Holding Inc. had a very successful initial public offering last week.
After saying it wanted to sell 21 million shares at $19 to $21 each, the human resources technology company’s stock offering was priced at $22. And when trading began Thursday on the New York stock exchange, the price jumped as high as $31.75.
Cannae Holdings Inc., the investment firm spun off from Fidelity National Financial, is a partner in Ceridian and will continue to own about 27 percent of the stock after the IPO, according to Securities and Exchange Commission filings.
Ceridian trades under the ticker “CDAY.”
St. Joe reports operating loss
The St. Joe Co. reported first-quarter earnings of $700,000, or 1 cent a share, helped by investment gains.
However, excluding special items, the real estate development company had an operating loss of about $500,000 in the quarter.
Revenue rose by 47 percent to $19.9 million in the quarter.