Sector Snap: LTL carriers fall as oil rebounds

"Despite having several less-than-truckload executives describe the current pricing environment as the most difficult in their careers, we believe most, if not all, less-than-truckload carriers will post second-quarter earnings per share at or above (Wall Street analysts') consensus," analyst Thom Albrecht wrote in a note to clients.

Albrecht said the carriers will be able to produce better-than-expected profits because the soaring price of diesel has allowed them to justify higher prices to their customers. Also, the closure of privately held Jevic Transportation Inc. has raised shippers' awareness about capacity issues across the sector, he said. Freight demand has also picked up modestly in the second quarter, Albrecht added, although volumes still remain weak.

He suggests that Arkansas Best Corp. and Con-way Inc. will likely meet his above-consensus estimates, and predicts Vitran Corp. will meet or beat his forecast which is slightly shy of Wall Street's average expectations.

Less-than-truckload carriers fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route.

In midday trading, Con-way fell 43 cents to $49.03 and Arkansas Best slipped 52 cents to $39.93. Vitran retreated 15 cents to $14.85. Elsewhere in the sector, Saia Inc. fell 37 cents, or 2.9 percent, to $12.47. Old Dominion Freight Line fell 14 cents to $31.22.

YRC Worldwide Inc., the nation's largest less-than-truckload carrier, lost 86 cents, or 4.7 percent, to $17.27.