Trucking stocks fall even as oil prices slide; analyst sees weak outlook for rest of 2008

A reduction in excess trucking capacity would help operators raise prices, but such a benefit to the companies could be delayed by the weak economy. Furthermore, despite a recent pullback in oil, prices for diesel fuel has risen 18 percent this year and more than 30 percent from a year ago.

The Associated Press

9/24/2008

DALLAS — Trucking stocks fell Tuesday despite a drop in oil prices, and an analyst pointed to sluggish demand in the sector.

Lee Klaskow, an analyst for Longbow Research, said his firm’s truckload survey for August showed little change in demand “and a less optimistic outlook for the remainder of 2008.”

Klaskow said a reduction in excess trucking capacity would help operators raise prices, but such a benefit to the companies could be delayed by the weak economy. Furthermore, despite a recent pullback in oil, prices for diesel fuel has risen 18 percent this year and more than 30 percent from a year ago, he said.

On Monday, analysts for Baird and JPMorgan suggested that trucking stocks would be hurt by weakness in near-term demand. JPMorgan analyst Thomas R. Wadewitz downgraded shares of several less-than-truckload carriers.

In Tuesday afternoon trading, shares of LTL carrier YRC Worldwide Inc. fell 31 cents, or 2.2 percent, to $14.11, and Arkansas Best Corp. shares dropped $1.77, or 4.6 percent, to $36.65.

Shares of truckload carrier Knight Transportation Inc. lost 20 cents to $17.88; shares of Werner Enterprises Inc. fell 90 cents, or 3.6 percent, to $24.31; and JB Hunt Transport Services Inc. lost 54 cents to $34.29.