Quality Distribution (QLTY) reported a fourth-quarter loss per share of $4.95, vs. $2.56 a year ago. Legg Mason downgraded the stock to hold from buy.
Analyst John Larkin says fourth-quarter results reflect costs related to the company's balance sheet restructuring, modest head count reduction program, and recently announced issues related to its insurance unit. On a continuing operations basis, he notes 15 cents EPS fell well short of the consensus 25-cents forecast.
Larkin cut his $1.07 2004 EPS estimate to 90 cents, and $1.35 2005 forecast to $1.15. He will carefully watch QLTY's performance over the next couple of quarters with an eye toward an upgrade if it can perform at least in line with Street expectations; if not, thinks the shares will enter a holding pattern.