Research Library
Below is our research library, listed in reverse chronological order. Please use the search box to look for research on a specific company or topic, or use the Calendar, Archives, or Sector links at left to browse for research from a specific time period or sector. If you are a Wolfe Trahan client and can not access any of the links in our library, please contact ITSupport@WolfeResearch.com to request our PDF decryption plug-in.
SAIA 1Q Earnings: Another Impressive Report – Is SAIA Rising Above the Pack?
Saia reported a strong beat of $0.34 versus our high-end $0.22 expectation, and following ODFL, we believe SAIA is operating best among the public LTL carriers recently, with a much more consistent focus on pricing over tonnage. While SAIA is executing well currently, its recent OR momentum has been driven primarily by yield improvement with relatively average to even below average industry tonnage growth. Off a higher yield base and with fewer competitors culling volumes today to drive up pricing, we think pricing improvement for SAIA and the industry will likely decelerate ahead. Thus, we believe SAIA will need to start seeing more material tonnage growth at some point in the future to drive material further OR improvement beyond 2012 towards 90%.
F: Several Modest Positives, but Stock May Stay Rangebound
On Friday, Ford reported 1Q EPS $0.39, above our $0.38 and Cons. $0.36, which excludes $255M ($0.06/shr) of special items, mostly UAW early retirement buyouts. Pretax income of $2.3B was in line with our est, with a $0.1B beat in Auto offset by a $0.1B miss at Ford Credit, and Ford’s 31% tax rate helped EPS by $0.01-$0.02 vs our est.
GT: Upside 1Q, but Is Pricing at Risk?
GT reported 1Q:12 EPS of $0.34 vs Cons. $0.07 and our ($0.02) est, ex- $0.39/shr of net charges. Though its $5.5B of rev was below our $5.6B est and cons $5.8B, GT beat on price/mix despite higher raw mats costs than we expected
Friday Flyer
We publish the “Friday Flyer” each week with highlights from the U.S. airline industry, and our opinion on how the events should impact airline stocks. Included are (1) a summary from the week with our sentiment gauge; (2) updates on noteworthy news events that might be interesting but maybe unworthy of a standalone note (3) key changes to airline schedules per OAG data; (4) recent stock performance and an update on the correlation of WTI and Heating Oil with airline stocks; (5) updated guidance/data points (6) our stat of the week (7) updated comp tables, and more.
JBLU: Upgrading to Peer Perform
JBLU results were good with EPS of $0.09 above consensus by $0.01 but below our estimate by $0.01 (the miss from lighter “other” revenue). April PRASM guidance of +8% to +9% y/y was strong given the difficult comparison, and though May is likely to decelerate (on an even harder comparison), our PRASM estimates come up, and management reiterated confidence in demand trends, too. Though we still take issue with JBLU’s decision to forego lucrative first-bag fee revenue, $21/pax in ancillary revenue is likely higher than network airline competitors and probably well above LUV (we estimate that closer to about $5/pax). It could be a lot better, but it could also be much worse.
UAL: 1Q12 Earnings
EPS beat consensus and us, but April PRASM guidance of ~5% was again soft, and further deceleration is likely into May. UAL faces very difficult y/y comparisons and struggles with yield traction following the early March cutover to a single reservation system called SHARES (the former CAL platform), and we expect the company’s PRASM deficit to peers to drag through the summer and begin to converge to the industry after labor day. Fortunately, we think DAL’s current success of harvesting merger synergies from its own Northwest Airlines acquisition serves as a beacon of hope for those long UAL, likely limiting downside in shares for the time being. We show a table comparing timelines of DAL’s merger to UAL’s merger (page 2).
ABFS 1Q Earnings: Horrible 1Q Now What for the Stock?
As a result of its $0.71 loss in 1Q:12 and continued struggles with labor costs into a likely still healthy but more competitive LTL market in 2012 and 2013 relative to 2011, we reduced our 2012 and 2013 estimates as well as our Target price. However, we expect earnings to inflect positive in 2Q (so book value will begin climbing again) and ABFS has a strong balance sheet and has seen positive trends into April. We see material upside for ABFS into 1) an improving economy which should support continued solid, albeit less strong LTL pricing and relatively solid industry tonnage, 2) potential company-specific labor catalysts from its pending lawsuit against YRCW and the Teamsters and/or its upcoming Teamster negotiations in April 2013, 4) YRCW’s potential bankruptcy which seems increasingly likely over the next 12-18 months, and 5) improving valuation which historically bounces off book value into upside catalysts, which we expect to become more apparent in 2Q:12.
Friday Freight
This weekly report presents the most recent views we are hearing from industry insiders and summarizes the research of Wolfe Trahan. Included are (1) key takeaways, selected shipper comments; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight & logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
LSTR 1Q Earnings: Strong Brokerage Results Drive Only Modest Beat (4/27/12
LSTR reported in-line 1Q EPS (normalizing for a lower tax rate) and in-line 2Q guidance. Our thesis remains largely unchanged on LSTR: we expect it will continue to show solid top-line growth in an improving economy given its relatively high-end exposure to flatbed at around one-third of revenue. However, LSTR’s mostly fixed-margin business model (65%-70% of its revenue receives a fixed margin percent) should limit operating leverage for LSTR going forward and we continue to prefer asset-based truckers in an improving freight and pricing environment.
On Track, Week 16 Ending April 21: Rails Volumes Inflect Positive on Easy Holiday Comp
Total Week 16 rail vols increased 2.4% y/y vs. -1.1% and -2.4% the prior 2 weeks. Excluding weak coal vols, rail vols grew 7.2% y/y, better than +3.5% and +1.6% the past two weeks. The rails faced an easy comp as Good Friday occurred in Week 16 last year. The rails will face another easy holiday comp next weak (Easter Sunday) before comps normalize in 2 weeks.
Research Library
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- Interactive Doh! Models
- Ed Wolfe Bi-Weekly Freight Update