Con-Way Gives Dour View; Street Returns It

SAN MATEO, Calif. (TheStreet) -- A day after Warren Buffett's historic wager on the freight industry, shares of the trucking company Con-Way(CNW Quote) fell as much as 10% on worse-than-expected results and wary statements from its CEO about the company's prospects for growth, at least in the near term.

After Tuesday's closing bell, Con-Way reported a third-quarter profit -- excluding the effects of accounting changes and "certain discrete tax items" -- of 39 cents a share. That still fell far short of the consensus analysts' earnings target of 52 cents.

Including the items, Con-Way earned $13.5 million, or 27 cents a share, down 65% from $38.8 million, or 81 cents a share, a year ago. Revenue declined to $1.13 billion from $1.37 billion in last year's third period.

But it was Con-Way's chief executive, Douglas Stotlar, who dampened the mood even further with a gloomy outlook for the short-term business prospects of his company. "Overall, the business environment continues to present formidable challenges, characterized by weak demand, excess capacity and pricing pressure," Stotlar said in a written statement. "We expect these conditions to persist in the near term, diminishing the prospects for earnings growth."

There were some positive signs, albeit muted. Con-Way said its tonnage volumes increased quarter-to-quarter, but profits thinned because pricing remains soft and fuel surcharge revenues continue to decline. (The company transports a lot of fuel.) The tonnage growth, meanwhile, meant that operating costs in the quarter were larger than normal, the company said.