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Analyst says LTL market fell further in Oct. amid tough pricing, lower demand

NEW YORK — Shares of less-than-truckload carriers fell Wednesday amid a slide in the broader market, as a Longbow Research analyst said the market for their services continued to deteriorate last month.

Analyst Lee Klaskow wrote in a note to clients that weakness appears to be accelerating among LTL carriers, which usually fill their trucks with freight from a variety of sources and re-sort it at terminals along their routes.

He said declining volumes and aggressive pricing are pressuring truckers’ operating leverage and will continue to affect results in coming quarters.

He lowered estimates for Con-way Inc. and YRC Worldwide Inc. for the fourth quarter and next two fiscal years.

Klaskow advised investors to avoid shares of “Neutral” rated YRC Worldwide because of the risk associated with the company’s turnaround plan, but said that Con-way’s value is still “above average” compared with its peers.

Also Wednesday, Moody’s Investors Service lowered its ratings for YRC Worldwide Inc., citing difficult operating conditions.

In afternoon trading, YRC stock sank $1.39, or 6.1 percent, to $21.60. Con-way shares, meanwhile, added 30 cents to $29.50.

Elsewhere in the sector, Arkansas Best Corp. slipped 65 cents, or 2.6 percent, to $24.51 and Old Dominion Freight Line Inc. lost $1.28, or 5.1 percent, to $23.91.