Fast, free-flowing exchange of information, goods, and services has made the world appear smaller in recent years, and global borders seem less relevant. Heretofore, UTi Worldwide
So far, so good
It's working. UTi has already started to see the benefits of belt tightening. Despite deteriorating volumes in airfreight forwarding, sales were $1.2 billion in its fiscal 2009 third quarter, up 3% from the same quarter last year. Its margins also held up; net income from continuing operations was $35.8 million, or $0.36 per share.
Prior to last Thursday's announcement, shares of UTi closed under $11, but since then its price has climbed by 20%. Meanwhile, its competitors Expeditors International of Washington
Foolish Takeaway
UTi's cost-reduction plan spans all areas of the company from maintaining cash management discipline to lowering operating costs through hiring freezes, travel restrictions, and streamlining operations. It has also begun to shed low-yielding businesses, and it is completely restructuring its IT systems. The company expects to see cost savings between $5 million and $6 million annually once the modifications to its technology organization are fully realized in fiscal 2011. Hopefully for UTi, shipping volumes will have picked back up by then, and it will be able to focus on expanding (rather than shrinking) once again.
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