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Con-way Falls On Downgrade Over Demand Worries

The Associated Press

NEW YORK (AP) — Shares of Con-way Inc. fell Monday after an analyst downgraded the stock, warning that falling shipments and lower prices forced by stiff competition will continue to hurt the already suffering trucker.

The stock dropped $1.72, or 7.6 percent, to $20.86 in afternoon trading. Shares have fallen as low as $12.99 in the past year.

Credit Suisse analyst Christopher J. Ceraso cut shares of the San Mateo, Calif.-based company to "Underperform," noting the stock has gotten too expensive to warrant his previous "Neutral" rating. Con-way shares have accelerated 40 percent since early March, despite worsening demand and a poor first-quarter performance.

Con-way said last week it lost almost $154 million in the first quarter, mostly due to an accounting charge.

The company acknowledged that there are still too many trucks fighting over too few shipments, and its cutting its prices to remain competitive. But it also said there are signs that demand may have stabilized, albeit at a very low level.

This echoes comments from other truckers and package carrier UPS Inc. But although demand may be at or approaching its worst point, Ceraso — along with many other analysts — predicts that demand will still remain weak until next year.