Some Carrier Earnings Top Expectations

Marten Transport reported fourth-quarter 2008 (4Q08) earnings per share of $0.27. That was better than analysts expected. Analyst firm Stifel Nicolaus issued reports on a cross section of logistics services companies based on earnings announcements and pre-announcements.

Cost control and declining fuel prices contributed to Marten beating the Stifel Nicolaus estimate by $0.06 and the Wall Street consensus by $0.07. Earnings per share (EPS) were up 93%, year on year.

Marten also continued repositioning assets to regional markets, said a Stifel Nicolaus report. Those markets are less cyclical, less seasonal, less fuel-intensive, more driver-friendly.

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Marten Transport reported fourth-quarter 2008 (4Q08) earnings per share of $0.27. That was better than analysts expected. Analyst firm Stifel Nicolaus issued reports on a cross section of logistics services companies based on earnings announcements and pre-announcements.

Cost control and declining fuel prices contributed to Marten beating the Stifel Nicolaus estimate by $0.06 and the Wall Street consensus by $0.07. Earnings per share (EPS) were up 93%, year on year.

Marten also continued repositioning assets to regional markets, said a Stifel Nicolaus report. Those markets are less cyclical, less seasonal, less fuel-intensive, more driver-friendly.

The company's overall operating ratio declined from 96.1 in 4Q07 to a more favorable 92.7 in 4Q08.

The company's balance sheet remains strong, says Stifel Nicolaus and was net-debt free at the end of 4Q08.

Werner Enterprises reported 4Q08 EPS of $0.26, down 7% year-over-year relative to adjusted 4Q07 results. The Street consensus estimate for 4Q08 EPS was $0.26, while Stifel Nicolaus had estimated $0.24.

The company benefited from a $0.10 EPS fuel tailwind in the quarter relative to 4Q07 (due to MPG improvement, the lag between fuel price paid and fuel price upon which the fuel surcharge is based, and the large spread between retail fuel costs and wholesale fuel costs).

Revenue, excluding fuel surcharge revenue, decreased 5% year-over-year, to $414.2 million in 4Q08. Trucking revenue, net of fuel surcharge revenue, dropped 6.4% year-over-year in 4Q08 as the company, in an effort to better match supply with diminished demand, pulled another 500 trucks out of its medium-to-long haul fleet during the quarter.

The company's fleet dropped by about 420 power units in 4Q08 relative to the comparable period in the prior year. The company's balance sheet remains strong, says Stifel Nicolaus.

Heartland Express reported 4Q08 EPS of $0.20, $0.03 ahead of the analysts' consensus. 4Q08 EPS was up $0.03 relative to 4Q07 EPS of $0.17.
The company continued its program to renew its tractor and trailer fleets during 4Q08. It took delivery of 378 new tractors and 152 new trailers during the quarter.

The company's 4Q08 operating ratio of 79.8 was much improved relative to 3Q08.

The company's balance sheet remains exceptionally strong, said Stifel Nicolaus. The company maintains a debt-free position along with a cash, short-term investments, and long-term investments balance of $228 million as of the end of 4Q08.

Canadian Pacific Railway reported adjusted 4Q08 EPS of C$1.15, a 4% EPS decline year-over-year. The 4Q08 EPS translates to USD $0.98 ($C/US; 1.169). The Wall Street consensus had been lowered to USD $0.87 during the quarter following severely negative weekly carloadings reported during the quarter.

Revenue, adjusted for exchange, grew 1% year-over-year. Excluding incremental volume from the DM&E acquisition, the company's carloads declined 11% year-over-year. When incremental volume from the DM&E is consolidated for November and December, the company's carloads declined a less severe 5.8% year-over-year.

4Q08 operating ratio of 76.5% was in line with the Stifel Nicolaus estimate. The analyst firm commented the company continues to make progress toward improving operations.

The company reiterated its 2009 capital spending guidance of C$800-C$820 million. This guidance represents an 18% decline from 2008.
(or 12.0x our 2010 EPS estimate of U.S. $4.00).

Con-way held its 4Q08 conference where management discussed the most recent quarter and outlook for 2009.
LTL tonnage and pricing trends reported in 4Q08 have continued to deteriorate into 2009. January tonnage is down ~11% year on year and Stifel Nicolaus estimates yields are down ~8% y/y (or down ~2% ex-fuel surcharges).

Con-way Freight's 4Q08's adjusted operating ratio (OR) was 98.1, 660 basis points worse than the adjusted 91.5 OR reported in 4Q07. And with tonnage and pricing trends only worsening near-term, the analysts expect the company to report a 102% OR in 1Q09.

The report observed, :”One has to wonder, if it is this bad at Con-way Freight, one of the best run LTL carriers in the US and a company that operated at no worse than a 92.8 OR in any quarter through the worst of the last recession, how bad is it for companies that do not operate nearly as efficiently?”
The report continued, “We expect this environment to force the exit of some (maybe a lot) of capacity over the next couple of quarters, which should help bring supply and demand closer to equilibrium. Until we see capacity exit, though, we do not expect LTL stocks (and Con-way generally trades like an LTL, even though it has a high-quality truckload segment and a non-asset-based logistics segment) to move much.”

CH Robinson reported 4Q08 EPS of $0.52, up a modest 6%, year-over-year. CH Robinson reported 4Q08 EPS of $0.52 versus $0.49 reported for 4Q07 EPS. The consensus 4Q08 EPS estimate was $0.52.

Truck brokerage gross profits grew only 3.1% in 4Q08, year-over-year. The company's intermodal gross profit grew a very solid 28% in 4Q08, year-over-year. Ocean freight forwarding gross profit climbed a robust 56% in 4Q08, year-over-year, while airfreight forwarding declined 2.2%, year-over-year, both from relatively small bases.

The company's balance sheet continues to strengthen on a solid foundation, said Stifel Nicolaus. Reduced 4Q08 volumes and declining fuel prices drove a sizable increase in free cash flow during the quarter.

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