) to "underweight," from "overweight."
Analyst Gregory Burns downgraded the trucking company on the view that it may be losing market share to non-union competitors Overnite and Old Dominion Freight. He notes the company's fourth-quarter earnings per share was below his 58 cents estimate, as tonnage growth was lighter-than-expected -- leading to a revenue increase of just 1.5%, vs. his 7.8% estimate.
Burns cut the $2.80 2004 earnings per share estimate to $2.40, and cut the $3.15 2005 estimat to $2.80. He cited lower tonnage, lower revenue assumptions, and a more modest improvement in operating ratio. Given the fixed cost leverage in the less-than-truckload model, Burns says he's concerned that Arkansas Best may not be fully participating in a cyclical revenue upturn.