Covenant Transportation Group, Inc. (CVTI)

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US trucking stocks fall after Con-way cuts outlook




NEW YORK CHICAGO, Oct 2 (Reuters) - Shares in U.S. trucking companies fell
on Thursday after Con-way Inc slashed its full-year earnings outlook because the
embattled U.S. economy had undercut demand for its services and forced it to
lower prices.
Shares in Con-way, a less-than-truckload (LTL) shipping company, were
down almost 15 percent at $36.56 on Thursday and hit their lowest level in more
than four years. LTL companies consolidate smaller loads into a single truck.
Shares in truckload shipping company JB Hunt Transport Services Inc
JBHT.O were down more than 12 percent, while Covenant Transportation Group Inc
CVTI.O was down 5 percent.
Truck brokerage firms C.H Robinson Worldwide Inc CHRW.O and Landstar
System Inc LSTR.O were down 6 percent and 9 percent respectively.
Con-way, which is regarded on Wall Street as one of the better
performing, publicly-traded LTL companies, said late Wednesday that it now
expects full-year 2008 earnings to fall within a range between $2.60 and $2.80
per share, down from its previous outlook of $3.00 to $3.40.
The U.S. economy had been "battered by an unprecedented confluence of
macroeconomic crises," Con-way CEO Doug Stotlar said in a statement.
Analysts said weak pricing is likely to continue given the current
economic environment.
"We expect pricing to deteriorate during the fourth quarter of 2008 and
first half of 2009 as competition will likely intensify as carriers attempt to
maintain freight volumes amid a weak economic backdrop," Wachovia analyst Justin
Yagerman wrote in a note for clients.
Due to that poor pricing outlook Yagerman said Wachovia's earnings
estimates for LTL carriers Arkansas Best Corp Nasdaq, YRC
shares slid 11 percent to $10.09 and Arkansas Best fell 6.7 percent to $31.71.
Keywords: CONWAY/SHARES Keywords: CONWAY/SHARES
Chuck Mikolajczak
cm

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