Research Library
Below is our research library, listed in reverse chronological order. Please use the search box to look for research on a specific company or topic, or use the Calendar, Archives, or Sector links at left to browse for research from a specific time period or sector. If you are a Wolfe Trahan client and can not access any of the links in our library, please contact to request our PDF decryption plug-in.Friday Freight
This weekly report summarizes the most recent views and research of Wolfe Research. Included are (1) three to five snippets or key takeaways from our team's recent channel checks with traffic managers about their experiences with purchasing, competition, and service from Airfreight and Logistics, Rail, and Truck capacity providers; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight and logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
On Track, Week 24 Ending June 20: Rail Volumes Improve Again On Easy Comp
Total Week 24 Rail vols declined 18.3% y/y, less worse than -19.2% and -21.1% the prior 2 weeks. This relative improvement reflects an easy comp vs. last year's Midwest floods. The easy flood comps will continue next week, although this week reflects the easiest comp vs. last year. We highlight that this week's improvement does not reflect any signs of a rebound in demand, as vols were flattish (+0.3%) sequentially.
EXPD: Update After Meeting with Mgmt and 8-K Filing
Yesterday we visited EXPD's HQ in Seattle. Mgmt was upbeat although there are no tangible signs of improved global demand.
CP: Initial Thoughts on Teck Coal Update – Good News for CP
Teck Resources announced that it expects 2009 coal sales to be at the upper end of the previously announced range of 18-20M tonnes. Teck noted significant increases in sales to China, and cancelled previously planned temporary production shutdowns in order to meet the increased demand. While still down about 13% from 23M tonnes in 2008, Teck's sales guidance is better than we anticipated and implies a solid sequential uptick in 2H:09. Teck now expects to produce 6M+ tonnes of coal in 3Q:09, up from 5M in 2Q and less than 4M in 1Q.
Friday Freight
This weekly report summarizes the most recent views and research of Wolfe Research. Included are (1) three to five snippets or key takeaways from our team's recent channel checks with traffic managers about their experiences with purchasing, competition, and service from Airfreight and Logistics, Rail, and Truck capacity providers; (2) notices of upcoming industry events; (3) key takeaways from some of our notes from the past week; (4) recent stock performance for our transport universe; (5) updated comparison tables for the airfreight and logistics group, railroads, and trucking; and (6) fuel trends for West Texas Crude Oil, On-highway diesel, Rail diesel, and Jet fuel.
YRCW: YRCW Continuing to Fight for Its Life
Yesterday 3 events occurred that potentially impact YRCW'S survival: (1) YRCW issued a press release showing that surprisingly its liquidity improved by $21M in May vs. April and that it came to terms with the Central States Pension Funds on collateral for pension payment deferrals for 2Q; (2) YRCW issued an 8K with its latest Credit Amendment in which banks have tightened provisions requiring YRCW to pay down its revolver with all proceeds from excess operating cash above $150M and from future real estate sales; and (3) The Teamsters met with their locals and apparently discussed providing an additional $500M of potential pension cuts to YRCW beyond last January’s roughly $250M wage reduction.
On Track, Week 23 Ending June 13: Rail Volumes Less Worse on Easy Midwest Flood Comp
Total Week 23 Rail vols declined 19.2% y/y, less worse than -21.1% and -25.2% the prior 2 weeks. This relative improvement reflects an easy comparison vs. last year's Midwest floods when vols dropped 5.6% y/y (compared with -1.5% the prior week last year). The y/y comps related to the floods will remain easy for the next 2 weeks. However, we highlight that this week's improvement does not reflect any signs of a rebound in demand, as vols were flat sequentially.
FDX F4Q Earnings: Few Surprises: Upside F4Q, But Estimates Continue Downward Trend
FDX reported Con't F4Q (May qtr.) EPS of $0.59 ($0.64 prior to normalizing tax rate), prior to a non-cash $1.2B pre-tax ($3.46) charge. This compares to our $0.49 estimate, Cons. $0.52 and $1.45 a year ago. Rev., EBIT and EPS declined -20%, -56% and -59% y/y, vs. -14%, -72% and -75% y/y in F3Q. We estimate that results were impaired by an estimated $0.05 y/y net fuel drag vs. an estimated $0.07 net fuel benefit last qtr.
GWR: Secondary Equity Offering Adds Acquisition Powder
GWR announced a 4.6M secondary equity offering last night (including the 600K shoe) that would generate about $110M of cash after fees, assuming a $25 execution price or 6% below yesterday's close. At that level and assuming the full shoe, we estimate the deal is about $0.18 dilutive to EPS annually. Assuming GWR pays down the full $88M on its revolver as it expects, we estimate the net impact of the deal will reduce EPS by a more modest $0.12.
FDX Earnings Preview
FDX is scheduled to report its F4Q (qtr. and year ended May) results before the market on June 17. Our F4Q EPS estimate of $0.49 (and Cons. $0.52) falls well within FDX's wide and conservative guidance range of $0.45-$0.70, prior to an announced $1.2B ($3.39/share) charge. We expect FDX to meet or exceed Cons. for F4Q, but likely for F10 estimates to come down as a result of its report.
