Analysts Expect Flat Earnings From Trucking

Transportation industry experts said that the U.S. economic slowdown likely took a bite out of the profits of many trucking and railroad companies in the second quarter ended Friday.

Speaking with Reuters, these experts said that most trucking companies are expected to report negative to flat second-quarter earnings per share compared to the same period last year. The main reason is that shipment volumes remain flat to lower, while fuel prices remain high.

Last week, FedEx Corp. (FDX) reported worse-than-expected earnings of 38 cents per share for its fiscal fourth quarter ended May 31, down 55% from the same quarter in 2000.

A recovery is not seen until at least the end of the year, and more likely, early 2002.

Analyst Jason Seidl of ABN Amro (ABN) told Reuters that truck drivers have told him they did not see an improvement in shipping volume over the last few months.

Another analyst, Dan Moore of Stephens Inc., said that although freight levels aren’t currently getting worse, they have yet to get better.

lthough recent economic reports, including a rise in orders for durable goods, have been encouraging, analysts said it will take time for shipment volumes to recover to levels seen in years past.

Reuters also noted that railroads were helped in the second quarter by higher demands for coal by utilities looking for a cheaper fuel source than natural gas.

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