$19-Million Quarterly Loss Adds to PS Group’s Woes

PS Group, which earlier this month announced an after-tax writedown of $15.6 million, Friday reported a $19.4-million net loss on $69.9 million in revenue for the third quarter ended Sept. 30. The San Diego-based company reported a $1.7-million net loss on $77.2 million in revenue during the third quarter a year ago.

PS Group’s stock fell by $.375 Friday to $38.75. The third-quarter loss was announced after the market had closed Friday. On Oct. 7, PS Group’s stock fell $5.75 to $38 when the company announced that it would take the $15.6-million after-tax writedown.

The writedown was driven by the anticipated loss of leases for two 747-200 aircraft that are operated by now-bankrupt America West Airlines. PS Group will have difficulty arranging new leases for the airplanes because of soft demand for older 747 aircraft, according to industry analysts.

Analysts also believe that PS Group could face additional problems with its aircraft-lease operation because it has leased jets to Pan American and Continental, which also are in bankruptcy court. PS Group’s leasing operation is also heavily involved with financially troubled USAir.

PS Group’s third-quarter revenue continued to be hurt by “a decline in travel demand” that reduced business at USTravel, PS Group’s travel management subsidiary, according to PS Group President George Shortley.

“It’s been a less than satisfactory year” for USTravel, Shortley said. “Seventy-six percent of our business is commercial travel . . . and commercial travelers aren’t traveling . . . because of the stagnant, weak, recessionary economy.”

PS Group’s revenue stream also was hurt by “curtailed production” at Recontek, the company’s metallic waste recycling subsidiary.

Recontek’s revenue stream was stalled in recent months because of “various physical plant and equipment modifications” at the company’s plant in Illinois, Shortley said. Work was “substantially” completed earlier this month.

PS Group reported a $23.2-million net loss on $218 million in revenue for the nine-month period ended Sept. 30.

A year earlier it reported a $1.7-million net profit on $226.5 million in revenue.