Another Carrier Lowers Expectations, Three LTLs Hiking Rates

Forward Air Corp. has become the latest trucking operation to lower expectations ahead of releasing its next earnings report.

It is forecasting third-quarter 2016 year-over-year revenue growth to range from between a 2% decline to a 2% improvement, down from a previously announced range of 1% increase to a 5% gain.

The company also lowered its adjusted income guidance range to 48 cents to 52 per share from its earlier announced range of 61 cents to 65 cents. The change, according to a statement, is due to lower freight volumes.

“Since our second quarter earnings call, the economic environment has remained sluggish. While we are seeing the effects across our portfolio, less-than-truckload volumes have been noticeably soft,” said Bruce A. Campbell, chairman, president, and CEO. “Through Sunday, Sept. 18, our unadjusted year-over-year LTL tonnage per day for the third quarter was down 4.6%. While our yields and margins have held up, we no longer project that we will achieve our previously provided guidance ranges and are adjusting our outlook for the quarter.”

Forward Air operates four principal segments: expedited LTL, truckload expedited services, intermodal and pool distribution services.

The news follows LTL carrier Old Dominion Freight Line Inc. saying early this month that it saw less freight during August.

LTL tons per day decreased 1.4% compared to August 2015, which it attributed to a 1.5% drop in LTL shipments per day and a 0.1% increase in LTL weight per shipment.

“The decline in Old Dominion's LTL tons per day for August reflects an operating environment that continued to be challenging,” said David Congdon, vice chairman and CEO. “The pricing environment has remained relatively stable, however, and quarter-to-date LTL revenue per hundredweight, excluding fuel surcharges, increased between 2% and 2.5% as compared to the same period of last year. As a result, our quarter-to-date total revenue per day ...Read the rest of this story

Economic Watch: Home Starts Slow, Overall Optimism Remains

Nationwide housing starts fell 5.8% to a seasonally adjusted annual rate of 1.14 million units in August, according to newly released data from the Commerce Department on Tuesday, the latest disappointing economic indicator, but there are still feelings overall economic conditions are improving.

“After two months of gains, the housing market gave back a bit in August,” says Ed Brady, chairman of the National Association of Home Builders. “However, with builders reporting low inventory levels and rising confidence, we expect more consumers will return to the market in the months ahead.”

Both housing sectors posted production declines in August. Single-family housing starts fell 6% to a seasonally adjusted annual rate of 722,000 units while multifamily production declined 5.4% to 420,000 units.

“The August reading represents a one-month blip in what has been a long-term, gradual recovery,” says NAHB Chief Economist Robert Dietz. “On a year-over-year basis, single-family starts are up 9% while multifamily construction continues to level off at a solid level as that sector seeks to find a balance between supply and demand.”

Overall permit issuance, an indicator of future home building, edged 0.4% lower. Single-family permits rose 3.7% in August to a rate of 737,000 while multifamily permits dropped 7.2% to 402,000. Combined single- and multifamily starts increased in three of the four regions in August; the Northeast, Midwest and West; while the South posted an atypical decline.

The pullback in August housing starts, and particularly the weakness in single unit starts, has lowered expectations by the Royal Bank of Canada with it comes to third quarter residential investment, but there there are higher hopes in other economic sectors.

RBC Economist John Nye expects a modest 2% annualized decline rather than flat activity, although that would still represent an improvement on the nearly 8% annualized decline recorded in the prior quarter.

“We also look for ...Read the rest of this story

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