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KeyBanc downgraded Arkansas Best (NASDAQ: ABFS) from Buy to Hold.
Analyst, Todd Fowler, said, "1Q12 results were significantly weaker than expected. Reported results include several unusual items that could be viewed as non-recurring (workers compensation, personnel investment, tax impact of operating loss), but also relate to operational and strategic decisions. In our view, pricing actions in 2011 have allowed the Company to restore yields to pre-recession levels; however, we underestimated the corresponding impact on tonnage, network utilization, margins and earnings. Reflecting our view for a gradual recovery in freight activity and excess capacity industry-wide, we believe lower tonnage levels could now have a greater impact on results than previously
anticipated. That said, with shares trading near tangible book, significant earnings leverage to improvements in volume and price, and the potential for
favorable labor negotiations and lawsuit settlements, we believe meaningful
downside is limited at current levels, but view our rating as more appropriate."
FY12 EPS estimate cut from $0.95 to $0.44.............................
StreetInsider.com - KeyBanc Downgrades Arkansas Best (ABFS) to 'Hold' After Weak Q1
Analyst, Todd Fowler, said, "1Q12 results were significantly weaker than expected. Reported results include several unusual items that could be viewed as non-recurring (workers compensation, personnel investment, tax impact of operating loss), but also relate to operational and strategic decisions. In our view, pricing actions in 2011 have allowed the Company to restore yields to pre-recession levels; however, we underestimated the corresponding impact on tonnage, network utilization, margins and earnings. Reflecting our view for a gradual recovery in freight activity and excess capacity industry-wide, we believe lower tonnage levels could now have a greater impact on results than previously
anticipated. That said, with shares trading near tangible book, significant earnings leverage to improvements in volume and price, and the potential for
favorable labor negotiations and lawsuit settlements, we believe meaningful
downside is limited at current levels, but view our rating as more appropriate."
FY12 EPS estimate cut from $0.95 to $0.44.............................
StreetInsider.com - KeyBanc Downgrades Arkansas Best (ABFS) to 'Hold' After Weak Q1