Trucking firms applying brakes

Shares of trucking companies got stuck in reverse Thursday after the price of oil surged and the nation's largest trucker revised sharply downward its first-quarter profit outlook.

The Dow Jones transportation average dropped from a record high, plunging 91.68 points, or 2 percent, to 4523.26, its biggest fall since June.

Crude oil for May delivery jumped $2.14, or 3.5 percent, to $63.91 a barrel on the New York Mercantile Exchange, its largest gain since Feb. 24.

Shares of YRC Worldwide Inc., formerly known as Yellow Roadway Corp., tumbled nearly 15 percent after it cut its first-quarter profit forecast on a drop in shipments, higher costs and price competition. Other trucking stocks also declined.

YRC said it expects first-quarter profit of 65 cents to 70 cents a share, down from its January forecast of $1 to $1.05 a share. The company cited a drop in shipments by retailers Wal-Mart Stores Inc. and Home Depot Inc.

"We didn't expect the company would experience the level of volume deterioration that it did, nor did we expect it to have the difficulty in adjusting the cost structure," said BB&T Capital Markets analyst John Barnes, who cut his rating on the stock to "hold" from "buy."

YRC stock slid $6.73, to $38.56, its biggest drop since Feb. 25, 1998.

Swift Transportation Co., the nation's second-biggest trucking company by sales, fell $1.05, or 4.6 percent, to $21.92. J.B. Hunt Transport Services Inc., the third largest, declined 99 cents, or 4.3 percent, to $22.04. Ryder System Inc., the nation's largest truck-leasing company, lost $1.35, to $44.56.

Andrew West, an equity analyst at New York-based Standard & Poor's, cut his rating on YRC to "strong sell" from "hold." He said it's not yet clear whether the issues YRC blamed in cutting its forecast signal a slowing for other freight haulers or are unique to the company.

"It could very well be that there is a little bit of each," said West.

YRC bought Chicago-based regional trucker USF Corp. last year to expand overnight delivery in the U.S., and purchased rival Roadway Corp. in 2003, becoming the nation's largest trucking company.