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PROGNOSIS * USA - Trucking profits may slip
Estimates lowered; industry copes with sluggish economy
Memphis,TN,USA -commercialappeal.com (subscription), by Jane Roberts -7 Apr 2007: -- In the days before trucking companies report first-quarter earnings, Wall Street is setting a somber mood with grim projections... Morgan Keegan, for instance, lowered estimates through 2008 on Celadon Group, Heartland Express, J.B. Hunt Transport, Knight Transportation, U.S. Xpress Enterprise and Werner Enterprises through the end of 2008, saying lackluster freight demand, rising diesel prices, weather and worries that truckers won't be able to raise rates enough to pull out of the slack will cut into the bottom line... Bear Stearns analyst Edward Wolfe expects higher fuel prices, coupled with weak demand, could trim quarterly earnings-per-share by as much as 10 percent... As the economy continues to slow, the trucking segment has gotten caught in the murky netherworld of rising fuel prices and anxious retailers trying to stem inventory costs. Coupled with bad weather this winter, shipments through February are down on a year-over-year basis for eight straight months... While March showed some improvement, analysts are inclined to credit the uptick to a combination of pent-up demand from bad weather in February and a rush of Easter goods because the holiday falls in early April... With crunches in the housing and automotive sector -- critical markets for trucking firms -- truckers have had to drive farther to pick up loads, meaning they've been forced to drive more unprofitable miles... The other factor in the equation is the uptick in trucking capacity and the number of drivers in general...
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