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John Larkin Releases First Quarter 2010 Transportation Earnings Preview

Wednesday April 07, 2010

John Larkin CFA, Managing Director of Stifel Nicolaus Transportation & Logistics Research Group has released his First Quarter 2010 Transportation & Logistics earnings preview where he outlines the various themes he believes best defined the quarter along with brief updates on each sector of the Transportation & Logistics marketplace and each company under our coverage. The following are his main takeaways from the quarter:

Freight demand continues to modestly strengthen but sustainability remains in doubt; First Quarter 2010 contract pricing remarkably competitive (except in protected sectors); not all, but many lenient lenders/lessors still supporting non-sustainable operations/capacity.

Freight volumes continued to gradually recover in First Quarter 2010, but inventory re-stocking, fiscal policy stimulus, and unusually accommodative monetary policy might have provided non-sustainable boosts.

Capacity still declining but at a slower rate than desired as most lenders and lessors remain unwilling to liquidate or repossess rolling stock in this depressed equipment value market; however, freight volumes appear to be nearing current capacity levels; yet contract pricing power still largely resides in the hands of shippers.

The shape of economic recovery remains uncertain.

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