(The Associated Press circulated the following on October 20.)
NEW YORK — A JPMorgan analyst on Monday lowered his earnings estimates for a slew of transportation companies, including railroads and truckers, predicting that economic weakness will continue throughout 2009.
Analyst Thomas R. Wadewitz lowered his 2009 earnings expectations most significantly for trucking companies – by 10 percent to 20 percent for many. The analyst wrote in a note to clients that both less-than-truckload and truckload providers will continue to suffer from poor pricing and weak demand.
He also lowered estimates by 8 percent to 13 percent for package delivery carriers UPS Inc. and FedEx Corp., railroads Canadian National Railway Co. and Canadian Pacific Railway Ltd. and trucking and logistics companies Pacer International Inc., UTi Worldwide Inc. and C.H. Robinson Worldwide Inc.
Wadewitz said that growth seems “unlikely” for transportation companies next year with the exception of some railroads and logistics companies because of the likely “recessionary economy.”
Lower fuel prices next year should mostly benefit Western rails Union Pacific Corp. and Burlington Northern Santa Fe Corp. and truckload carriers Heartland Express Inc., Knight Transportation Inc. and Werner Enterprises Inc., which all have “insufficient” fuel surcharge programs and large fuel expenses.
Wadewitz said he is confident that the U.S. railroads will continue to grow earnings per share by double-digit amounts, driven by pricing strength, lower fuel and slimmer staffs.