Thanks mostly to concern about high fuel costs, the Banc of America last week downgraded its rating of two trucking companies.
Less-than-truckload carrier U.S. Freightways was downgraded from "strong buy" to "buy," according to published reports. However, the company is still its top pick in a challenging sector. Its 2000 estimate of earnings per share dropped from $1.56 to $1.31. Even though the securities firm estimates the company will see record results with over 27% earnings growth for fourth quarter 1999, U.S. Freightways is being painted with the same brush as the rest of the trucking industry.
Truckload carrier Werner Enterprises has been downrated from "buy" to "market performer." Werner has said that high fuel prices are significantly affecting its fourth-quarter earnings. The price of a barrel of oil is at a nine-year high. Like many truckload companies, Werner has apparently had little luck in enforcing its fuel surcharge program. To make matters worse, the high fuel prices are affecting the pool of owner-operators, adding to driver recruitment problems. The analysts have lowered Werner's 2000 earnings-per-share estimate from $1.56 to $1.31.
Shares of both companies, both traded on Nasdaq, were down at the time of the rating change.
Less-than-truckload carrier U.S. Freightways was downgraded from "strong buy" to "buy," according to published reports. However, the company is still its top pick in a challenging sector. Its 2000 estimate of earnings per share dropped from $1.56 to $1.31. Even though the securities firm estimates the company will see record results with over 27% earnings growth for fourth quarter 1999, U.S. Freightways is being painted with the same brush as the rest of the trucking industry.
Truckload carrier Werner Enterprises has been downrated from "buy" to "market performer." Werner has said that high fuel prices are significantly affecting its fourth-quarter earnings. The price of a barrel of oil is at a nine-year high. Like many truckload companies, Werner has apparently had little luck in enforcing its fuel surcharge program. To make matters worse, the high fuel prices are affecting the pool of owner-operators, adding to driver recruitment problems. The analysts have lowered Werner's 2000 earnings-per-share estimate from $1.56 to $1.31.
Shares of both companies, both traded on Nasdaq, were down at the time of the rating change.
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