Sector Watch: Transportation Stocks Fill Up With Losses
(Updated from 2:17 p.m.)
Some mixed news on the economy and a late-evening earnings warning yesterday from
Roadway Express
(ROAD) - Get Report
are helping to put a damper on transportation stocks today.
The
Dow Jones Transportation Average
was recently off 2.2%.
Freight-services provider Roadway Express said it expects second-quarter earnings to fall at least 60% below its results from the year-ago period. The company cited the economic downturn as the reason for its profit shortfall. After its warning,
Goldman Sachs
analyst Jordan Alliger cut his 2001 earnings estimates on the company to $1.75 a share from $2.35 a share, but maintained his rating of market perform. Roadway was hit hard: It was recently off 14.3% to $22.44.
"The shippers had said people just aren't shipping as much," said Doug Myers, vice president of equity trading at
IJL Wachovia
in Atlanta.
Also blaming the economic slowdown for a hit to its business,
Airborne
(ABF)
, parent of shipper Airborne Express, this afternoon said it was laying off 640 workers, or 2.5% of its workforce. The stock was recently 1% higher to $11.
Like Roadway, other shipping companies were trading lower this afternoon. Delivery-service company
USFreightways
(USFC)
was recently slipping 5% to $26.95.
J.B. Hunt Transport
(JBHT) - Get Report
was off 4.5% to $19.19.
Airlines are also getting taken for a ride.
Southwest Airlines
(LUV) - Get Report
was losing 4.5% to $19.11 and
Delta Air Lines
(DAL) - Get Report
fell 2.4% to $46.50.
UAL
(UAL) - Get Report
, the holding company for United Airlines, took a hit of 2.95% to $36.13. On Wednesday, Moody's credit rating agency downgraded UAL's debt to junk status.
AMR
(AMR)
, parent of American Airlines, fell 2.9% to $37.85.
The warning season for companies to 'fess up about financial problems in their second quarter is just beginning, and Myers said he expects other transportation companies to preannounce to the downside.