Sector Snap: Trucking Companies Fall

Stifel, Nicolaus & Co. analysts John G. Larkin and David G. Ross said rising gas prices are leading to increased costs for truckers and forcing them to find creative ways to make up for the loss, from tacking on surcharges to cutting back on packing materials.

"Surely Wall Street analysts are by now keenly aware that the U.S. appears to be entering a period in which inexpensive diesel fuel has become a thing of the past," Larkin and Ross said in a client note. "As a result, the nearly $4 price tag on each gallon of diesel fuel has succeeded in threatening the financial viability of many truckload carriers."

Wednesday's average price of diesel in the U.S. was $4.03 per gallon, according to AAA. That's a 32 percent jump from $2.74 per gallon a year ago.

Diesel and other fuel prices are closely tied to the price of oil, which has been climbing. Light, sweet crude for May delivery grew $1.94 to $103.16 a barrel on the New York Mercantile Exchange.

Difficult weather conditions have also cut into revenues, Larkin and Ross said. They cautioned that many trucking companies will miss their first-quarter earnings forecasts, a sentiment with which Goldman Sachs analyst Chris Hussey agrees. However, Hussey said some truckers stand to benefit as frustrated customers switch freight lines.

In morning trading, shares of Old Dominion Freight Line Inc. tumbled 74 cents, or 2.3 percent, to $32.17.

Shares of American Commercial Lines Inc. sank 56 cents, or 3.4 percent, to $16. Landstar Systems Inc. shed $1.34, or 2.6 percent, to 51.$25.

And Con-Way Inc. lost $1.23, or 2.4 percent, to $49.85.