Con-way up on better-than-expected freight results

Con-way climbs on freight division's better-than-expected performance in 4th quarter

Associated Press

NEW YORK (AP) -- Con-way's stock rose Thursday after a Citi analyst upgraded the trucking company's shares, saying its freight division could be poised for improvement.

THE SPARK: In its fourth-quarter earnings report Wednesday, Con-way said cargo loads declined in its freight division, but the unit's revenue still rose. It pulled in more money from fuel surcharges, which helped.

THE BIG PICTURE: The freight division makes up about 60 percent of Con-way Inc.'s business. It also does other kinds of shipping and offers companies logistics and warehouse services.

The company said that it is controlling costs and improving productivity to protect its business in a weak economy.

For the quarter overall, its adjusted profit of 26 cents per share was down a penny from the same period in 2011, while revenue rose 3 percent to $1.36 billion. Analysts polled by FactSet expected profit of 28 cents on revenue of $1.35 billion.

THE ANALYSIS: Christian Wetherbee of Citi Investment Research boosted Con-way to "Buy" from "Neutral" and raised ihis price target to $39 from $30. He said the January volume decline in the freight division wasn't as bad as he'd feared, which was a good signal for the current quarter, and the company was able to charge higher prices.

SHARE ACTION: Shares of Con-way gained $2.12, or 6.6 percent, to $34.08 in afternoon trading. The Ann Arbor, Mich., company's stock has bounced back from a 12-month low of $25.97 in November.

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