SOURCE: Five Star Equities

Five Star Equities

May 22, 2012 08:20 ET

Trucking Industry Showing Signs of Recovery in 2012

Five Star Equities Provides Stock Research on Arkansas Best and YRC Worldwide

NEW YORK, NY--(Marketwire - May 22, 2012) - The Trucking Industry has been experiencing a "good" recovery recently according to FTR Associates Senior Consultant Noel Perry. The relationship between gross domestic product (GDP) and freight is one of the main factors driving FTR's confidence in 2012. Five Star Equities examines the outlook for companies in the Trucking Industry and provides equity research on Arkansas Best Corporation (NASDAQ: ABFS) and YRC Worldwide, Inc. (NASDAQ: YRCW).

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"Because GDP is back up above 2%, we should be generating pretty good freight growth. As GDP recovers right now, we would expect a freight bonanza that comes from that would be a quarter or two later." Even with the expected freight growth, the industry is still far from recovery in regards to truckloads, which in 2006 was at a high of 200 million a year and in 2009 dropped to 158 million.

"In the first quarter of 2012, we're only about 40% recovered back to previous peak," Perry said. "This says something fundamental about the need for fixed infrastructure and fixed investment in transportation. We won't get to a new peak until at least 2015, and that assumes we have no recession out there. If we get a recession, which I think we will mid-decade, we could not get to a new peak in trucking or rail perhaps until the end of the decade."

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Arkansas Best last month announced a first quarter net loss of $18.2 million, compared to a net loss of $12.8 million in the first quarter of 2011. "Although first quarter results do not meet our expectations, we are positioning our company for longer term success," Arkansas Best President and CEO, Judy R. McReynolds said in their first quarter 2012 earnings release.

YRC Worldwide Inc. recently announced that it has been named to the FORTUNE 500 list of the largest U.S.-based companies. YRCW was ranked 487 overall. "We are in good company, as many of the organizations on this list are among our more than 200,000 customers that depend on our LTL service as a critical part of their supply chains," said James Welch, chief executive officer of YRC Worldwide.

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