Sector Snap: Analyst Sees Rough Road For Truckers

NEW YORK (AP) — Trucking companies' profits will be even worse than expected for the first quarter as pricing competition grows fiercer and demand improves only modestly, an analyst said Tuesday.

KeyBanc Capital Markets analyst Todd Fowler lowered his earnings estimates and stock price targets on seven trucking companies he covers, suggesting slow demand and poor pricing are overshadowing the benefits of capacity reductions. Fowler believes that there hasn't been enough fleet cutbacks to account for sinking demand.

Year-over-year trucking demand has been falling 15 percent to 20 percent since mid-November, and Fowler doesn't think demand will improve much anytime soon.

He recommends investors tread lightly in the sector, suggesting that nearly all trucking companies — especially the ones with many trucks and other cost-intensive assets — will continue to struggle in the near future.

Trucking stocks shot up Tuesday amid a rebound in the broader market. YRC Worldwide Inc. leaped 18 cents, or 10.2 percent, to $1.96. Werner Enterprises Inc. gained 24 cents to $12.89, and Landstar System Inc. rose $1.05, or 3.8 percent, to $28.51.