Analyst trims estimates on Old Dominion Freight

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NEW YORK (AP) - A Raymond James analyst cut his earnings estimates on trucking company Old Dominion Freight Line Inc., predicting an increasingly difficult freight environment throughout this year.
Shares of Old Dominion fell $1.96, or 6.7 percent, to $27.30 in afternoon trading. The stock has ranged between $18.47 and $40.09 in the past year.
Analyst William H. Fisher noted that Old Dominion has predicted fourth-quarter earnings will be more than 50 percent lower than last year as shipment weights continue to fall and pricing remains weak.
Fisher now expects Old Dominion to earn $1.74 per share, and $1.05 per share in 2009. Analysts polled by Thomson Reuters, on average, expect the company to report earnings of $1.78 per share in 2008 and $1.47 in 2009.
The analyst said, however, that his forecasts don't include the potential benefit of other less-than-truckload companies failing and handing over customers to Old Dominion.
"We stress such an event could provide swift and significant upside to our numbers due to drastically improved margins, pricing, and volumes," he wrote in a note to clients. "In particular, the largest unionized player is facing significant financial distress while controlling 25 percent of the less-than-truckload market."
Rumors have surfaced that YRC Worldwide Inc. could be on the verge of bankruptcy. It has taken a number of steps to shore up its finances, including a proposed wage cut.
Fisher maintained his "Outperform" rating on shares of Old Dominion.
Less-than-truckload carriers such as YRC and Old Dominion usually fill their trucks with freight from a variety of sources and might re-sort and redistribute it at a company terminal along their route.
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