Morgan Keegan Cuts SCS Transportation
Morgan Keegan cuts trucking transportation company SCS Transportation (SCST ) to market perform from outperform.
Analyst Art Hatfield says the company lowered its forecast for 2005 to $1.35 to $1.55 from $1.55 to $1.70. He notes second-quarter earnings per share results will now include 10 cents per share in higher-than-expected expenses at Saia Motor Freight Line due to severe accidents in the quarter and an adverse verdict in an employment case that dated back to 2002.
He thinks remaining earnings per share shortfall will come from continued weakness from its Jevic Transportation unit, as management cited tonnage weakness and continued high expenses.
Hatfield believes weaknesses at Jevic can no longer be overlooked. He now sees 35 cents second-quarter earnings per share, $1.35 2005 earnings per share, and $1.80 2006 earnings per share.